The world over, most financial institutions and similar providers are still recovering (or trying to) from disruptions being caused in the market by the ongoing Covid-19 pandemic. But will the long-term impact of the challenges being caused by the pandemic lead to a complete overhaul in how financial institutions function?
The pressure is now mounting on banks and financial providers, both of whom are expected to contribute to stabilizing the economy in the time of high unemployment and financial hardships.
Read More: What’s Coming With Europe’s “Historic” Crypto Regulations?
These changes now call for banks and financial institutions to rethink how they serve their customers according to when and where they need it, in a way that also protects their data and finances from rising online security risks.
To serve a growing base of remote, digital-first customers better, financial institutions and banks need better data and more predictability that can help enable smarter decision-making when it comes to customer acquisition and retention plans.
Access to real-time customer data is crucial in order for financial institutions to create better product offerings that reflect their changing needs.
What should Banks and Financial Institutions be Keeping in Mind In The New Normal?
AI-powered Personalization
If there’s one big takeaway from the ongoing Covid-19 pandemic, it’s that digitisation is the key element in ensuring consumers have access to their loans, credit, finances no matter where they physically are.
The inability to leverage data to guide customer buying decisions with the right buying triggers will affect the potential of a provider. Better modelling methods backed by artificial intelligence and machine learning can enable banks to serve customers in a more agile manger while also ensuring a high level of product personalization – the insights from these platforms further allows FIs to tailor products and product offerings (like loans for instance) to suit specific consumer needs based on their financial plans and situation.
Read More: GlobalFintechSeries Interview with Chyna Qu, Co-Founder and COO at DeFiner
Adjusting Quickly to Market Changes
Market changes can be dynamic and the onus lies on providers to adjust instantly to changing marketplace and consumer needs. This has been a key lesson from this year’s ongoing Covid-19 pandemic. At a time when a global downtime or slowdown is affecting corporate and personal budgets and income, it is crucial for business leaders (for instance) to determine how best they can adjust the pricing of their products and services to ensure business goals and continuity.
Systems that help leverage past data or provide a viable solution to the above can help leaders identify current market performance and trends to help update their core pricing strategies against market fluctuations more correctly. The right pricing-product fit is key to showing customers the value-add in a service.
Understanding a Customer’s Personal & Business Financial Hardships
AI and Machine Learning backed platforms that help financial institutions better understand their customer’s buying sentiments can also help determine what financial product or service the customer or prospect needs most at a given point in time. By recognizing financial hardships at both the financial and business level, financial institutions can boost their ability to create better-fit products or offer a custom solution (for example, reduced interest on a particular loan offering) based on their actual financial circumstances.
Enterprise-wide analytical models can help detect when borrowers are experiencing hardships based on their past payments towards investments or other loans (missed payments / delayed payments).
Read More: WhatsApp Presents New Shopping and Payment Tools
The Covid-19 pandemic has driven the need for financial institutions to be more agile and responsive. Smarter analytics that help finance providers plan and build products to reflect their customer’s financial situation will be key to driving more value.
