"Banks that took the right steps increased their resilience and improved their competitive position"
With the government considering the financial services industry as essential to Kiwis during the COVID-19 alert level 4 lockdown, banks have a special role in helping individuals, businesses, and the economy to cope with the pandemic. Management consulting firm Bain & Company’s latest report detailed how banks could protect and support their people and customers during this uncertain time.
Bain & Company emphasised the importance of prioritising the safety of employees, going the extra mile for customers, making the balance sheet more resilient, and designing solutions that could yield benefit s in the longer term.
Report authors Dirk Vater, Roberto Frazzitta, Giulio Naso, and João Soares encouraged banks to protect their people first through safety measures in branches and essential offices as they are exposed to the virus.
“Most banking processes can be managed with some adaptation—in our experience, with a success rate of over 90%,” the authors explained. “Good health practices mandate a timely supply of hand sanitizers, cleaning equipment, masks, gloves, and plastic or glass screens. Branches need new protocols for traffic management, including selective closures, reduced opening hours, staggered access for customers, and by-appointment-only meetings.”
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The authors said banks could help their customers further by temporarily suspending loan payments and fees on transaction services, scaling up call centres to deal with the influx of calls, and providing support to affluent customers whose investments impacted by the pandemic.
They also explained that “liquidity is a bank’s best friend right now.” Therefore, banks could minimize leaks by getting a clear sense of liquidity needs under various scenarios, creating daily dashboards showing cash changes, communicating regularly to customers about the organisation’s soundness, and reviewing marketing campaigns to ensure that the products are still competitive.
“Addressing customers’ urgent needs now and meeting the longer-term issues head-on will allow banks to thrive in the months and years to come. During the last financial crisis, banks that took the right steps increased their resilience and improved their competitive position. The same thing will happen this time,” the authors concluded.
