Crisis Innovation and Strategy: How Banks are Responding to Covid-19

A few weeks ago we organized a virtual round table on how banks are responding to the Covid-19 pandemic. In this post we recap some of the key questions we discussed, and also asked our panelists to respond to some of the questions from the audience we didn’t get to during the live event.

To rewatch the round table in its entirety, check out this link: https://www.youtube.com/watch?v=_5LBwZ80nzk

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Speakers

• Stefan Osthaus — CX Specialist
• Janos Pereczes — Chief of Digital Business, MKB Bank
• Daniel Daszkiewicz — Chief Innovation Officer, Alior Bank
• Nigel Owen — Communications Strategy, SABB / Alawwal

What were some of the first actions you took in response?

János Pereczes: Reacting and pro-activity. On the reacting side there is a moratorium for every loan, it means you don’t have to pay until the end of the year. One of the first actions actually, was complying to the regulations in terms of providing what the law requires us to do. The second thing was a ‘service manual’, how our call center, digital channels and branches can work tightly with each other. We started to introduce new rituals. We have the common knowledge, common belief system, and we introduced the digital queuing in the branches and a video chat service, where they can actually talk to real advisors from the branches.

Daniel Daszkiewicz: We wanted to react very quickly, we published safety guidelines for the entire bank, whoever could work remotely was encouraged to do so. Where it was not possible, the recommendation was working in shifts. We decided to close down the office two week and since we on remote. Since we have a very tight communication. We launched the specific communication for the clients how to use the digital solutions and we teach them, also.

Lessons learned from past crises — how do you figure out the right thing to do?

Nigel Owen: When you are in a crisis, there is a huge amount of pressure and it’s very hard to think clearly. Right thing to do: having good tools to listen, have social media channels, where you can reach your customers. Having a really good news feed and you have to know your audience. You have to think clear, what is the best way where you can help. Empathy is really important also.

How are you responding to long term effects of the crisis?

Daniel Daszkiewicz: There are lots of things we are doing. We have a lab which operates business. We are making connections with digitally, and asking our clients about main fears, concerns, how do they feel about it. There is a big flaw in this process, because now in the middle of the crisis, clients are suffering, the outcome of this won’t be that clear that we hope. As a response to that, we are launching a partnership program, where we are looking for the startups and partners to help our customers.

János Pereczes: We did not start any new initiatives to get more feedback, we started new initiatives to be able to gather those feedbacks more quickly. In the last couple of months, we were working on an overall Customer Experience Strategy, and we started to focus to be able to quickly aggregate the data and make decisions.

Questions from the audience:

How is your bank helping clients better understand and project their financial situation (e.g. depletion of reserves) and learn about available solutions? What kind of advice are you providing to your clients?

János Pereczes: We started with a landing page on our website, and we have a team, who actually just focused on uploading the news and fresher and fresher FAQ-s and how they can reach us. In Hungary, it is a big question now, because we have this moratorium for every loan, borrowers don’t have to pay until the end of the year. One of the big questions is: should I pay or should I not pay? And what we are focusing on is actually helping our customers make that decision. Obviously we can’t make the decision for them, but we are providing calculators and useful data on how they can make this decision. Most of our retail customers have decided to keep on paying the loans; the SME-s are the ones who hesitate.

Daniel Daszkiewicz: In our bank we responded to this on lot of levels, we also have a credit moratorium for our clients, but we have really crucial role in distribution of public funds, and our bank is playing the key role of this process, so we support business clients, with getting the working capital loans, guaranteed by the Polish government.

Nigel Owen: It is a massive economic problem, banks have a crucial role now, but it is difficult for them as well […], banks have a big role here in trying give people and businesses as much financial peace of mind as they can.

Have you seen a large uplift of digital channels users who weren’t using them before?

Daniel Daszkiewicz: We see the uplift of digital channels definitely, a lot of customers using their phones to contact with the bank, but it also creates a challenge right in a bank, to truly deal with such a volume coming close. We definitely see the changes in behaviours.

János Pereczes: In Hungary it’s the same like in Poland about the digital channels, we can sense 20–30% growth, and it is a challenging situation, when we have to be really proactive and open-minded and solve the problem by tomorrow.

Digital service developments, which previously had to go through a longer approval process are introduced quickly these days (ex: in cash management services, paperless approvals, etc). How risky do you consider the quick decisions related to quick digitalization? How can we reduce this risk?

János Pereczes: There is a balance. You can still move fast, without not breaking the important things. We try to simplify the circle to have a shorter process time.

Daniel Daszkiewicz: Security is one of the most important things, customers trust banks. So trust is the biggest currency that we have, so we do not even think about to reducing the risk in any process that we are running. It is interesting to see, that some of the projects in the bike line came out to the top of the list, and once everybody is working in the organization on the project, how quickly they can turn out to be products and available to the clients. Recently we launched the verification solution, photo ID, so when everyone is on board, things can move pretty quickly, and this is something that the organization really learned in these times.