“Virtual banking started years ago; pandemic catapulted it” - Banking Experts reveal
COVID-19 has brought to bear the relevance of technology in the banking sector and has chartered a new path of cashless and online transaction, integration of services, remote consultancy and such like and some experts have expressed their knowledge on the “new normal” for the banking sector in light of the pandemic and technology imperatives.
The country Manager of PWC Ghana, Mr. Vish Ashiagbor explained,
“banks have invested and they are reasonably well equipped; what will change is how they do business with their customers and how they monitor and track their exposure to different segments of the economy… Investments have been made whether you’re talking about digitization or shoring up the bank zone”.
Indeed, no country was ever prepared for the catastrophe dealt to economies by the virus. Financial institutions are the lifeblood of every economy and when it comes to its preparedness in relation to the impact on the banking sector, Mr. Ashiagbor was of the opinion that,
“I wouldn’t say they’re ready but what I’ve seen these last two to three years as the whole industry have been strengthened by the whole reforms that started in 2017…by some foresight, by policy makers or regulators, we find ourselves in a situation where banks are stronger to be able to deal with this challenge… Today, I think we are ready but it’s something that has happened by virtue of reform that has taken place”.
Regulation and security
The issue of security has been one of utmost importance to every sector and economy as most operations have gone technological and the safety of information and data have become more vital than ever.
To this Nana Otuo Acheampong, a Banking consultant, was of the view that,
“Banking is a security conscious industry and that we take the confidentiality of customers so seriously, and one would have thought that this wouldn’t happen. So right now, what the banks are doing is, they are investing a lot in encryption and verification of identities so that they are ready to combat the unforeseen. So, banking is not going to be the same as it was before December 2019”.
He further explained that, “the banking sector started years ago, it might have been slow but then the pandemic has effectively turbocharged the growth of the internet and its being used more… The returns that are made to the regulator have gradually moved from data based to electronic based and they’ve all been digitized… If you take anti money laundering, that has also been digitized…and the pandemic has catapulted us into the future”.
Security has become crucial as technology and digitization has invaded the banking sector and for that reason stringent measures must be put in place to track information shared on platforms. Mr. Ashiagbor rationalizes that, “as we are pushing more through electronic channels there’s also a need for greater and more efficient security mechanism, because the opportunity for fraud and cyber thefts also increases.
Virtual transition of transactions online
Recently, the Bank of Ghana has tried to motivate a lot of the commercial banks by waiving charges on a lot of electronic transactions and that could invariably challenge people to do more of online transactions and engagement especially in this season where people are being advised to either sanitize their hands after contact with money or opting for cashless payment.
Mr. Acheampong explained that,
“the process started some years ago, where instead of the analog physical system, we felt that we will be able to do it digitally, and we didn’t feel it was so urgent until this pandemic dawned on us…and what COVID has done is to catapult it to a phase altogether”.
In addition, Mr. Ashiagbor quipped,
“we’ve been on a journey as far as digitization of electronic transaction is concerned in this country and in the banking industry for sometime… what this situation has led to is acceleration of that effort… it has moved from a means of competitive advantage to more or less a necessity”.
Remote staff by banks
Humans have always been social ‘animals’ who implicitly or otherwise desire the need for connection and some physical interaction even in business. People will like to see where their monies are and the faces representing them, but what the pandemic has left in its wake is social distancing and staffs of most banks have had to remotely work from home and customers will have to cope.
In furtherance, Mr. Ashiagbor stated that,
“over the years banks have had to move gradually from what you call the brick and mortar to more electronic one… Banking services is a relationship based business and so there’s the need to connect to the customer… Things will not change entirely, but there will certainly be changes because once we have been forced as we have been to contend with the issues of COVID-19...and dealing with our clients remotely, it will become an acceptable way of working. I believe but it will not be a 100% situation where you have no physical interaction with your client but it will be reduced”.
Going forward, COVID-19 has forever changed the face of economies, businesses and the banking sector which plays a significant role in the aforementioned disciplines, the way forward can either see a merger of the lessons learnt and implementation of ideas from COVID experience or a total overhaul of practices in the banking industry.
Mr. Acheampong was quite optimistic about the future deliverables of the banking sector saying,
“the practice of putting 7,000 people in a building is no longer going to be the norm, whether we like it or not, working from home is going to be part of this process…instead of having database in silos, if you centralize, it means that people can work from home and access the database.” He was also of the view that relationship management will change as its going to be moved from face-to-face interaction and move online to digital platforms.
Credit appraisal and monitoring is one major domain which would have to change according to Mr. Ashiagbor because
“the whole ecosystem in terms of the assumptions one makes as to what makes a business attractive or not so attractive from a lending point of view will have to change because of the impact of COVID-19”.