As the world adapts to the current health crisis, many industries are dealing with this disruption in a variety of ways. This blog series looks at the effects COVID-19 is having on some of the most impacted industries, and it explores how distributed Agile development can help advance the digital transformation journey amidst the chaos. In the last installment of this series, we looked at the fitness industry and how COVID-19 is changing the entire operations landscape there. In this blog, we examine the impact of COVID-19 on the finance industry.
While the banking industry was much stronger before COVID-19 than before the financial crisis of 2008, the need for different strategies around marketing, innovation and digital banking was trending well before the pandemic hit. Banks and financial institutions need to utilize this time to reinvent the way they use data, AI, technology and development teams to drive marketing, innovation and the digital delivery of products and services to their customers.
The COVID-19 pandemic could be the most serious challenge facing financial institutions in nearly a century. As the economic fallout spreads, retail banks find themselves juggling both new and existing priorities that require concrete steps. They’re working to keep their distribution channels open, despite new social distancing requirements and supervisory and compliance functions that were never designed for remote work, all while managing revenue and customer expectations. Banks rely heavily on a network of interlocking vendors, which has increased with the rise of FinTech. In fact, virtually every aspect of modern banking now depends on the availability of third parties, such as credit card processing networks, lockbox operators, clearinghouses and depositories.
So to say that the financial industry was lagging behind others in terms of digital transformation would be misleading. In fact, financial institutions have long been on the cutting edge of digital solutions that not only enhance productivity but the experience of customers as well. In a recent interview with Jeremy Balkin, head of innovation at HSBC, he was asked about innovation and said: “In terms of innovation during COVID-19, we’ve got to triple down.” Take the advent and adoption of mobile banking for instance. Some banks were slow to adopt at first, but have reached a point where virtually every financial institution has a mobile application by which customers can access and manage their accounts.
In fact, since the pandemic began back in February, mobile banking usage has skyrocketed by 35% in the United States. Fortunately, widespread adoption of mobile digital services by financial institutions of all sizes was in place before the pandemic arrived and has made social distancing a viable reality. But, looking past the outbreak, financial institutions of all sizes must focus on major digital improvements. While contactless payments have been around for some time, they were about convenience, mostly. Now, in the era of coronavirus, they have become a necessity.
The advancements in digital technology driven by this “war” with the Coronavirus are making the crisis more bearable and are enabling businesses to keep working with access to key services (communication, payments, credit, collaboration, etc.) while enabling social distancing and helping to fight COVID-19.
At the same time, consumer adoption will increase, given the lack of other options at the moment, and this will enhance familiarity. COVID-19 could stay with us for months (even years) and it’s unlikely to be the only pandemic we see. Every few years the world sees new outbreaks of infections (SARS, H1N1, Ebola, Zika, etc.), but the global impact of COVID-19 is forcing businesses to rethink how to prepare for such disasters, and what the finance industry of the future might ultimately look like.
Distributed Agile Development for the Finance Industry
As the finance industry finds its footing in these uncertain times, it is clear that digital transformation has and will continue to play a major role in the future. In an industry that was already trending in a digital direction, the companies that have embraced digital transformation long before this pandemic have found themselves in a formidable position amongst their competitors and cemented themselves as a reliable partner to their customers.
Since the start of the Coronavirus, consumer demand for digital banking has never been greater. Unfortunately, many organizations that were delaying digital transformation efforts have been caught flat-footed, without the ability to deliver a positive digital experience. The good news is that, with the overall transaction volume low, the opportunity to build improved digital platforms abounds.
Banks and other financial institutions have a unique opportunity to gain an edge and reap long-term benefits by doubling (or tripling) down on digital now. With limited resources and time being of the essence during this global crisis, distributed Agile software development is an effective way to support the transition to an increasingly virtual financial world. Distributed Agile software development involves groups of geographically dispersed technology teams who are able to continuously generate value by delivering software, meeting deadlines and innovating on high. Through this approach, software development is uninterrupted and can be conducted in a fluid, fast and iterative way, enabling, in this case, digital financial experiences.
For those who are unable to achieve distributed Agile software development on their own, there are organizations that offer it as a service and are ready to aid these impacted industries. Exadel is one of them. With Agile software development and engineering teams throughout North America and Eastern Europe, Exadel is continuing to deliver digital transformation projects. We’ve been working as a distributed Agile software development company for decades and have the resources and expertise to take on even the toughest digital transformation projects. The Exadel team is especially passionate about helping organizations during these times when, for many, there is no choice but to embrace digital transformation.
If you are looking to kick your digital transformation into high gear, contact us today to get started.