Speaking at the Deloitte How Will COVID-19 Change the Banking Industry? webinar, Alexey Voylukov, vice president of the Association of Banks of Russia, outlined how 3 trends arising out of the COVID-19 pandemic are defining how banking will look in the future. These 3 trends are: (1) an acceleration of digital solutions, (2) increased nationalization efforts (i.e. less reliance on foreign production) and (3) strengthened roles of the state to solve problems.
These 3 trends are beginning to impact how consumers and governments view the banking sector. In particular, consumers are becoming exposed to new realities of online life and are likely to continue such a way of life even after the pandemic is over due to the convenience it provides. For financial institutions, this will mean a complete rethinking of their business models and the ways they assess risk. This will also mean that they will need to rethink the way they communicate, both with consumers as well as with regulatory agencies, to meet the requirements of new realities. This includes increased transparency and much more rapid responsiveness to new regulatory requirements (i.e. 15-30 days as opposed to 6-9 months). Of course, this focus on the rapid incorporation of new technologies and an adaptability to meet an ever-changing regulatory environment will mean that financial institutions will also need to ensure they have information security models that are robust and flexible to new situations.
In short, COVID-19 is not just changing the game; it’s changing where and how the game is played.