NOW NEXTCOVID-19: What to Do Now, What to Do Next

April 2020

COVID-19 implications for the financial services industryWhy doubling down on the customer experience is key in a global crisis

Greater China

We’re all in this together

As the potential impact of COVID-19 becomes clearer, and most firms are in full business continuity mode, retail and commercial banks need to act urgently to moderate the damage it does to their customers, their people and their organizations.

Banks will be critical players, with the ability to help individuals and businesses alike weather the storm. The focus of their actions will necessarily be in the short term, but many of the measures they take will lay a foundation for future sustainability and growth.

Hopefully, the crisis will also serve to forge stronger, more trusting bonds between banks and customers.

As your business partner, Accenture stands ready to provide whatever skills, capacity, and assistance you may need to deal effectively with this crisis. In this report, we examine the issues banks should address and the initiatives they should consider to support their customers, maintain their business, reinforce their organization and play a positive role in the economy and society.

Let’s show what the banking industry can offer the world on its best day.

Access all Accenture’s COVID-19 perspectives here.

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Unfortunately, the COVID-19 situation differs significantly from the SARS experience, both in magnitude (a global pandemic affecting all supply chains) and timeline. Despite the best efforts of the government and society to eliminate COVID-19 as quickly as possible, we expect it will take longer than the typical bank’s BCP horizon of six months. Banks will have to consider the sustainability of the measures they have introduced.

This means that financial services firms in Greater China will not only need to extend many of their emergency activities but altogether rethink the way they operate and serve clients (especially the processes and transactions that require paper documentation or physical presence). This is true for all business lines and clients, from large corporations to small and medium-sized businesses and from wealthy clients to the mass retail market.

Banks require more at this time than business continuity planning

Naturally, the bank’s priority is to secure financial health and defend the existing client base. Mid- to long-term zero and negative interest rates, as well as a shortfall in fee income from reduced economic activity, will force financial institutions to manage their cost with precision and speed. But a cut in spending across all bank activities will risk delaying or even preventing the important new solutions and capabilities intended to help overcome the impact of the COVID-19 crisis.

Hence, we suggest that banks reprioritize their funding, shifting the focus to projects and initiatives that maintain or improve the customer experience (CX) while at the same time reducing or eliminating additional cost.

Banks in mainland China and Hong Kong have demonstrated over the last three months that their experience with SARS in 2003, and their respective business continuity plans (BCPs), has enabled them to keep operating and serving their client base while complying with government-imposed restrictions on the public and businesses.

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Plan for mid- to long-term COVID-19 scenarios

Reprioritize budgets and investments

Redefine the customer experience

Expand data analytics usage

Proactivelyreach out to clients

Partner for speed and impact

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Industryapproach

SMEapproach

Critical bank capabilities

Retailapproach

Co-create scenariosand explore with client

Analysis Proactive client outreach

Analyze industry exposure

Analyze client situations

Analytics and data science

Co-create with selected clients (analysis and

solutions)

Automated client analysis and scenario development

Information portal and automated engagement (virtual agent)

Channels (video conferencing, remote collaboration, virtual agents, instant messaging, microsites, portals, apps)

RM- and AI-based engagement

Provide solutions for identified issues

Ecosystem partnerships for accelerated and agile delivery

Provide solutions for liquidity and CF

Framework approach

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Clients will remember for a long time how they are treated during the next 6 to 12 months.

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In the current circumstances, an enhanced CX does not mean a simpler way of doing things (i.e. single-tap transactions) but rather improved access to banking services without physical engagement, and the provision of the personalized advisory services and credit lines that clients need to keep themselves and their businesses afloat.

The foundation for doubling down on the customer experience is, without a doubt, the bank’s analytics capabilities. These enable it to leverage all available digital channels for customer information and engagement and to employ intelligent automation to eliminate manual effort, create paperless processes and journeys, and introduce virtual agents.

To address their BCP priorities while simultaneously looking to enhance the CX, financial institutions should consider changing from an inward-facing risk-focused approach to one that leverages external specialists who can help augment and accelerate the necessary actions. This will enable them to meet the immediate demands of the crisis while building a foundation for the CX they will need in the future.

The current situation requires what is key in any crisis: analysis, information, proactive communication and swift action. This applies across all of the bank’s large corporate, SME and retail clients, but the steps are executed in different ways.

Whereas co-creation with large corporations is important for building trust and meeting specific requirements, proactive analysis and outreach are also key for SME customers. Intelligent automation and digital operating models allow advanced banks to do the same for their retail customer segment in a scaled, cost-effective way.

Review budgets and rebalance the allocations for “run the bank” and “change the bank” while eliminating shortfalls in CX and risk (internal as well as external).

Redeploy capacity and expertise within the bank to enhance agility and impact where it matters and to enable employees to work remotely and improve customer service.

Execute a data-driven approach to understand SME and corporate customer challenges and needs. Combine internal and external data with industry expertise to develop scenario simulations for, e.g., liquidity and cashflow forecasting, network analysis, and assessments of the likely impact of job losses among retail customers.

Develop an end-to-end digital advisory and lending capability, especially to address new business opportunities driven by global supply chain disruptions.

Improve the elasticity of the credit management process. This includes regulatory and government initiatives to help businesses survive the COVID-19 aftermath.

Increase fraud and cyber security analysis and detection activities and advise customers proactively on these topics.

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Plan for mid- to long-term COVID-19 scenariosWe believe that the following list of focus areas and related actions will help banks in Greater China to master the current challenges while at the same time helping them prepare for a post-COVID-19 economy:

All of these actions require deep data and analytics capabilities (predictive), agility in reacting to change (stability and speed) and scalable, industrial-strength automated operations (low cost).

With a carefully orchestrated approach, these crisis management actions can accelerate bank transformation into truly digital organizations.

We define a truly digital bank as a data-driven and agile organization that continuously seeks to improve its customer experience through business ecosystems and leveraging next-generation operations.

A short-term portfolio of change initiatives, defined by the bank’s key business functions (across customer journeys and business silos) and executed by a combination of inhouse IT and external business partners, can accelerate results and ensure timely, high-quality delivery.

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Digital bank capabilities

Short-term customer experience initiatives

Time toproduction (weeks)

Customer experience

Predictive SME analysis for credit risk and cashflow forecast 12–16

Instant messaging bank engagement (RM and virtual agent) 2

Document upload and verification system 8

Government subsidy / emergency support identification andenablement

4–18

SME and retail financial distress information and support automation (real-time feedback)

12–18

Data-driven bank

Proactive customer outreach for high impact / high-risk industries and customers (RM support and AI-based automation)

2-4

RM augmentation for customer best action (scenario-based) 16–20

SME / corporate insolvency analysis (scenario) with action plan for impacted employees (retail customers)

2–4

Example of a COVID-19 response portfolio with a focus on customer experienceThe following table lists a portfolio of mainly short-term change initiatives (max. four-month implementations) to overcome COVID-19 challenges relating to the customer experience. The focus is on practical advice and actions customers can take to address their specific liquidity and cash-flow needs.

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Example of a COVID-19 response portfolio with a focus on customer experience (cont.)

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Digital bank capabilities

Short-term customer experience initiatives

Time toproduction (weeks)

Agile organization

Employee enablement (training and toolset) for remote customer service (video conferencing, collaboration tools)

2

Co-creation with key SME segments and select large customers 4–16

Business ecosystem

Partnership with trade platform for accelerated credit approach (based on additional insights)

2–4

Integration of adjacent crisis management services 8

Next-generation operations

AI-enabled customer service 16

Paperless utility 12–16

AI-based fraud detection and cybersecurity 16

1. Elastic collaboration

Using multilayer collaboration tools to enable staff to work

remotely whilst cultivating the requisite mindset through

education campaigns that encourage adoption and

continuous engagement.

2. Insight-driven reallocation of the workforce

Utilizing big data analytics to optimize workforce

effectiveness by informing allocations and prioritizing

activities based on customer and business needs.

3. People-first approach

Fostering a purposeful and engaging culture, the backbone

for success in any organization. Effective remote teams

require more intentional practices to drive alignment and

program execution. For instance, a comprehensive and

well-articulated “definition of done” is crucial for driving

consistency across teams.

In addition to investing in the customer experience, banks need to swiftly get their workforce ready for remote working, enabled by technology and powered by the right mindset and culture. It is essential that they not only invest in tools but forge new levels of trust, empower the workforce with decision making, create a culture of resiliency, and position their business for growth and productivity in the future.

Three things are key to achieving this:

Flexible work models

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Authors

Michael ZwieflerManaging DirectorAccenture Greater China Banking Leadmichael.zwiefler@accenture.com

Johnny LeungManaging DirectorAccenture Banking & Capital Markets Lead, Greater China johnny.j.leung@accenture.com

Marina LauSenior ManagerAccenture Banking, Hong Kong marina.m.lau@accenture.com

Vini NanayakkaraManagerAccenture Banking, Hong Kong vini.nanayakara@accenture.com

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To help our clients navigate both the human and business impact of COVID-19,we’ve created a hub for all of our latest thinking on a variety of topics.

Each topic highlights specific actions which can be taken now, and what to consider next as industries move towards a new normal.

From leadership essentials to ensuring productivity for your employees and customer service groups to building supply chain resilience and much more, our hub will be constantly updated. Check back regularly for more insights.

VISIT OUR HUB HERE

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DISCLAIMER: This document is intended for general informational purposes only and does not take into account the reader’s specific circumstances, and may not reflect the most current developments. Accenture disclaims, to the fullest extent permitted by applicable law, any and all liability for the accuracy and completeness of the information in this presentation and for any acts or omissions made based on such information. Accenture does not provide legal, regulatory, audit, or tax advice. Readers are responsible for obtaining such advice from their own legal counsel or other licensed professionals.

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