Is purpose-driven banking a path forward?

Stuart Chalmers is Head of Financial Services for Accenture Scotland

The challenges posed by COVID-19 have been a catalyst for change for all sectors and all walks of life. Within financial services, we have seen banks rapidly adapt working practices, while at the same time addressing the new and critical needs of customers and clients under extreme pressure.

Uncertainty is still very much with us, but equally this is a time to consider how we build back better and emerge as leaders in the post pandemic world.

One of the key tenets of a new Accenture report is to embrace and accelerate the trend for purpose-driven banking. On one level, this is about reminding ourselves that the fundamental role of banking in any community is to support individuals and businesses to thrive. On another it is about recognising the need to build trust. Confidence is low right now and clients will remember for a long time how they get treated in the next six to 12 months.

The stark reality is that SME loans are ten times greater in volume and 25 times greater in number than before the pandemic. In addition, hundreds of thousands of people have deferred mortgage payments. Before long they will all have to be addressed. Therefore, to demonstrate sustainable intent to be a customer’s best ally through all financial situations and help them adjust to radically changing circumstances is arguably the overwhelming banking priority.

What this means in practice needs unpicking and how it is delivered sensitively will vary with every banking scenario, but here are a few considerations.

  • How does a bank intimate that it understands a customer or client’s situation? We need to consider how we help people and organisations manage their money through automated interventions, personalised nudges and micro-level targeting, without losing sight of the human experience.
  • What does it mean to be a trusted advisor in the new world? Customers face new challenges, will have different needs and motivations and banks will have to consider how they manage their role as trusted advisor and the skills required.
  • How can banks offer greater control to their customers? Remote and virtual interactions are now embedded in our social and business relationships, so banks will have to consider how they operate securely over these new communications channels and still maintain the human touch.

Over the past few months, we have seen banks and other financial institutions make some rapid and at times astonishing adjustments. Many banks have set up the online, real time capabilities to manage requests for mortgage holidays. Equally, we have seen organisations put in place the facilities to enable its entire contact centre workforce to operate from home, albeit that there are still technical challenges to deal with peak demand.

At Accenture we have also charted how the bank customer is changing. Their expectations of service have risen along with their increased use of apps, contactless payment and virtual consultations. Making their lives easier, using analytics to understand and anticipate their needs and reaching out to them proactively, could be critical to reinforcing a trust-based relationship in the future.

A purpose-driven bank that is integral to people’s lives needs to address these longer-term issues and in Scotland there are areas where we can make meaningful progress. In the first instance, our broadband infrastructure needs consideration if more transactions are to happen seamlessly online from home-based operations.

As important is capitalising on our skills base. This crisis has accelerated digital automation, but future success depends on an equal investment in the people and jobs that underpin the human experience. Scotland has been at the vanguard of re-skilling its workforce for a digital future and we have a rich talent pool on our doorstep through our universities. These human skills will be paramount to support any technology advances.

Banks are clearly in a unique position to serve their customers and help communities survive this crisis. What’s more, there is undoubtedly an opportunity to embrace the current momentum for change with new ideas and new insights. How this translates into a new model that is trusted in the new normal post-coronavirus is something we need to grapple with now.