By Shridhar Rane, EVP & Head – BFS Product Engineering at Azentio

During the pandemic, customer expectations and demands rose like never before, giving a tough time for the financial services industry. Technology, to a great extent, helped businesses in the industry cope with the situation, but are they prepared for the scenario post-Covid-19?

The Covid-19 pandemic has quickly changed customer attitudes towards digital banking services, in retail and commercial banking, pushing financial institutions to invest in and speed up digital adaptation for transactions and product servicing, enriching customer experience and customer journey.

For a long time, banks have tried to adopt newer technologies and incorporate an effective digital path for their customers to stay competitive. We’ve seen some markets having greater success in digital adoption based on the support and push from the respective central banks. The closure of branches and offices in the wake of Covid-19 has forced a shift to digital services for operations ranging from account opening, and lending to trade finance services.

Processes demanding documents, physical signatures, now allow scanning, OCR and digital signing. Customers have adapted well to these changes. The most recent EY Future Consumer Index shows that nearly 60% of customers have changed the way they bank.

Now, the key challenge for banks and financial service providers is how they can keep their customers on digital platforms after the Covid-19 pandemic and how do they achieve the right balance of human touch and a greater personalized service through multiple channels, such as online, social media, ATMs, kiosks, mobile banking, IVR, call centres, and others. Customers are expecting customized digital services like withdrawals, deposits, outward remittances, collection of payments to be available for their retail and commercial banking and financial needs. This has brought forth a new range of services, including video KYC, digital customer due diligence and digital signature.

Digitalisation as a Global Trend

  • According to a McKinsey Personal Financial Services Survey, the share of customers in Asia–Pacific emerging markets using digital banking grew significantly, from 54% in 2017 to 88% in 2021
  • In a recent speech, Andrea Enria, Chair of the Supervisory Board of the European Central Bank (ECB), stated that since the onset of the pandemic, the European banking sector recorded a 23% increase in first-time digital users while global remote digital payments surged by approximately 50%
  • In India too, digital banking grew rapidly with mobile banking applications becoming the in-thing. Recently, the National Payments Corporation of India (NPCI), an umbrella organisation for operating retail payments and settlement systems and which manages the Unified Payment Interface (UPI) in India, approved a WhatsApp proposal to allow its users to transfer and receive money through the messaging app in a multi-bank model.

Technologies that Banks Scaled and Adopted Most During the Covid Pandemic
Since the outbreak of the pandemic, banks have experienced a marked shift in customer behaviour resulting in increasing their investment in new and emerging technologies to enhance processes, customer experience and digital access in the following areas:

Open API Banking: Banks and financial institutions have started using APIs for direct interfacing of applications for a seamless digital experience for customers. The use cases worth mentioning include digital customer onboarding, artificial intelligence (AI) based online lending, digital trade financing, digital payment gateways & bill payments, and digital investment platforms, among others.

Cloud Technology: Banks have started to take their applications on the cloud with resilient cybersafe networks, so they are digitally accessible to their customers and employees from the safety of their homes. As remote working becomes the norm, banks had to give extra consideration to ways in which sensitive data is accessed. Banks could easily get services for encryption, firewalls, Data Loss Prevention (DLP) to balance between locking data down securely behind a corporate and the public network, making but it more open and readily accessible to employees and business partners in having to shift to support new ways of working and keep the existing business processes and operations moving. Cyber frauds and regulations such as General Data Protection Regulation (GDPR) had to be taken care of, so the risk and compliance managers re-evaluate the associated risks accordingly for Anti-Money Laundering (AML) and Customer Due Diligence (CDD).

Omnichannel Banking: The intent to increase and capture more customers and drive revenue from keeping track of all touchpoints with existing and potential customers across all channels like internet, mobile, SMS, social media, IVR, and call centres,, has given banks the means to reach to their customers with much-needed offerings and services . These also resulted in reducing the cost of customer acquisition and servicing and added additional revenue.

Cognitive Intelligence Technologies are witnessing increased usage among banks to get the power to manage big data. These also help in developing predictive models that are vital to personalise user experience for customer services, investments and goal-based product offerings. Banks can leverage by building predictive credit and market risk models for monitoring defaults and attrition of customers. Data can also be used for reporting as required by central bank regulators.

Internet of Things (IoT) has proved to be invaluable for banks, as it can capitalise on advanced data analytics for better understanding customers by even factoring in their social media usage patterns. While IoT devices protect banking assets using their improved identity verification features, IoT-powered systems can automatically execute a number of activities, be it disabling cards or processing customer requests, among others.

Azentio Software’s banking products Kastle™ Universal Banking Suite, Amlock™ Crime Detection and Management Solution and MFund Plus™ Wealth and Investment Management Suite; and Expected Credit Loss (ECL) and Kastle™ Digital Strategy Box (KDSB) platforms, have been at the forefront of meeting the most crucial operational needs of financial institutions during the pandemic.

Most Promising Banking Technologies in the Post-Covid World

All technologies we mentioned in this blog will witness increased deployments by financial institutions as we leave the Covid threat behind. But financial institutions have to seriously start planning for the extensive usage of these technologies and make them an integral part of their growth strategy. These technologies include:

  • AI, especially ‘explainable’ AI, that has the potential to turn seemingly worthless data into a treasure trove, enabling financial institutions to take smarter commercial decisions
  • Blockchain seems to be the most promising technology which the financial services industry will look forward to, to carry out transactions securely and manage critical documents
  • Cloud technology will gain more prominence, especially with the increasing requirement among banks for dematerialized document management that enables authorized personnel to access documents in accordance with their roles and responsibilities
  • Machine Learning (ML), with its capabilities to process voluminous data and swiftly recognize trends or suspicious behaviours, is another technology that will find increased usage.

This shows that in the post-Covid world, digitization will not only be a valuable tool for growing the business, but also an unavoidable competitive engine that can be used at every level, so that your products and services can meet or even exceed your customers’ ever-increasing demands.