- Posted On: June 1, 2020
COVID-19 on digital banking: What to expect
The World Health Organization has recommended banks to digitize their services and reduce in-person banking as much as possible. Traditional banking has been reported as a risk factor in the transmission of the novel COVID-19 virus. The close contact between clients in the queues and with the banking officials is too risky for contracting the disease. It only takes a single person among such a group with or without symptoms to possibly infect everyone. When Singapore DBS bank confirmed the novel pandemic disease in one of its bank officials, the possibility of transmission and infection in a bank set-up among the bank officials and clients became evident.
Before the COVID-19 pandemic, most banks had not invested fully in digital banking and it was seen as an optional banking system and as an extra revenue stream. However, most banks in the world have and are closing down the traditional banking systems and even switching completely to digital banking. The U.S banks have already received a notification from the federal financial institutions' examination council to test the capacities of their online systems for the influx in digital banking expected from the total closure of in-person banking.
The World Health Organization has also confirmed the possibility of banknotes in transmitting the COVID-19 virus. This followed the realization that the virus can live on solid surfaces for some time. Cashless transactions are therefore highly encouraged to break the chains of infection.
Transformation in Banking
COVID-19 has been a catastrophe that no one was prepared for. Therefore, many people had not been prepared to handle banking through online means. To acclimate clients to the new norm, banks have embarked on frequent communication with their clients on the guides to managing online banking. Most banks have also reviewed policies on credit and withdrawal limits to accommodate the special circumstances arising due to the abrasion of in-person banking. Fintech companies pitch in and offer paperless and all-digital solutions, like important document uploads for processing crucial bank transactions or full execution of the KYC process.
Besides going online with banking as a response towards reducing transmission of COVID 19, banks have also resolved for the remote working of most of its officials to reduce contact. It had never been projected that banks officials will once operate entirely from home. However, this is the only opportunity that bankers now have to at least preserve their profits and reduce the severity of economic shocks arising from the pandemic.
What is next?
In a bid to curb fraudsters from taking the advantage of remote customer transactions, banks getting even more vigilant at securing the data and records. Cybersecurity should shield remote working of their officials. Customers wishing to make transactions remotely are also taken through stringent verification processes in order to ensure that fraud is avoided. Nonetheless, with the knowledge of the online banking phobia in customers who had not been fully inclined to digital banking, banks are also supporting their clients to ensure that the verification processes remain easy to handle. In a recent survey, 48% of the respondents reported having received directions on printing, signing, and emailing papers to the banks before approval of any bank transaction.
It is evident that digital banking will be even more popular among bank clients following the COVID-19. Online banking systems will be even more capable of handling the influx of digital banking transactions. The need to stay safe will drive both banking officials and their customers in as much digital banking solutions as possible.
Leor Melamedov, (n.d.). Corona Virus (COVID 19) and the Banking Industry: Impacts and Solutions. Retrieved from https://www.lightico.com/blog/coronavirus-covid-19-and-the-banking-industry-impact-and-solutions/
Bill Gardner, (2, March 2020). Dirty banknotes may be spreading the Corona virus, WHO suggest. Retrieved from https://www.telegraph.co.uk/news/2020/03/02/exclusive-dirty-banknotes-may-spreading-coronavirus-world-health/
Financial Times, (n.d.). Banks seek trading rules guidance as corona virus spreads. Retrieved May 13, 2020 from https://www.ft.com/content/7481b6fa-5f4e-11ea-8033-fa40a0d65a98
Howard Schulman, (n. d). Digital Banking Realities: The onboarding experience at leading banks as told by students. https://www.lightico.com/blog/digital-banking-onboarding-of-leading-banks/