Building on the lessons learned during crisis: Foundations for a new customer-obsessed, risk-aware banking era

Building on the lessons learned during crisis: Foundations for a new customer-obsessed, risk-aware banking era

It seems a lifetime ago that the Chancellor first announced the unprecedented raft of support the UK Government would make available to citizens and businesses.

Support schemes including CBILS helped deliver much-needed funding to businesses – but it was a bumpy road to navigate.

The learning curve for banks has certainly been steep. Other than quickly adapting to remote working, perhaps the biggest challenge they faced has been helping customers navigate these uncertain times, staying close to them, and most importantly understanding and responding quickly to their rapidly-evolving needs.

But banks have proven they can adapt, and they have demonstrated an ability to take bold decisions, drive execution, and deliver real change at speed.

In the UK, lockdown and social distancing measures are once again beginning to ease. Whilst it’s fair to say we haven’t yet arrived at a definitive ‘new normal’, there is no doubt that businesses will need ongoing support for many years to come, and banks must respond.

Now is the time to embed the lessons learned.

In fact, PwC noted in its Where Next for Banking report that “83% of customers believe banks have a moral obligation to help society during this crisis”.

Meeting customer expectations

Corporate banking customer expectations were already evolving at speed before the Coronavirus pandemic hit, but now that process is playing out at an even more accelerated pace.  How banks respond will shape banking reputations for years to come. The stakes are high.

As in a recent Mckinsey report on remaking the customer experience in response to coronavirus – “The last time there was a global crisis, banks were widely perceived to be a big part of the problem. This time around, banks are central to the solution.”

But, banks have and will continue to walk a delicate tightrope between supporting tens of thousands of UK businesses attempting to recover from a huge social and economic crisis, whilst at the same time operating lending criteria and managing risk priorities to protect both themselves and the taxpayer, all whilst controlling their own cost to serve – after all, banks have also been directly adversely affected by the pandemic.

Customer and risk in equilibrium

When frontline relationship managers have the right level of risk savvy and insight, and their colleagues in operational and risk roles have the right level of commercial awareness, everyone benefits.

This is of course a significant step-change for banks who typically divide credit, risk and customer-related activities into front, mid and back office silos – but it is also a real game-changer.

By integrating these activities and fostering end-to-end collaboration, banks can eliminate bottlenecks, meet customer expectations and work within risk and cost constraints.

So what is the mechanism that will get them there?

Right data, right time, the right way

The mechanism is of course data, and leveraging insights derived from that data.  By building a rich understanding of the customer that incorporates both customer and risk intelligence, banks can:

  • Improve prospecting effectiveness
  • Conduct early-risk screening at scale
  • Improve customer engagement and relationship management
  • Automate credit and underwriting, while improving accuracy
  • Improve KYC procedures
  • Improve onboarding speed
  • Automate ongoing monitoring, and make complex cyclical customer reviews obsolete
  • Improve KYS and reduce supply chain risk

The future is not determined. The choices banks make over the next 12 months will define the next decade

To find out more about why investing in a customer and risk intelligence platform is the best decision corporate banks will make as we move into the next new normal, download our new whitepaper.

Banking in a new normal

Written by independent consultant Jeff Courtney, an Advisor with Elixirr (a management consultancy helping established corporates thrive amidst disruption) and former senior corporate banking executive, this is the ultimate guide to corporate and commercial banking in the new normal, and building the foundations for the customer-obsessed, risk-aware bank that future success demands.