Recently, Huawei and International Data Corporation (IDC) jointly pre-released their whitepaper on reshaping banking for the recovery era for 2020 during the Huawei Global Financial Services Industry Summit 2020. The Whitepaper is scheduled to publish globally in August. IDC believes that there will be five key stages of recovery and at each stage there will be opportunities to optimize new growth. The banking industry overall, stands in a strong position to weather the stresses of 2020 and that it should bet utilize this time to reinforce its overall capabilities and reassess priorities in terms of digital transformation.
Banking to utilize technology to accelerate recovery
The year 2020 has witnessed unprecedented systemic shocks triggered by COVID-19, but as with all other crises, both challenges and opportunities arrive at the same time. The whitepaper will analyze the responses of banks to the trials of current business conditions, dissecting the best responses from across the world in terms of both tactical and strategic responses, and establish a firm recovery framework that banks and other financial institutions can adopt to position themselves to better reach and serve their customer needs for the upcoming recovery phase.
IDC believes that the banking industry stands in a strong position to weather the stresses of 2020 and that using this period to build further capabilities and infrastructure in digital and data will enable them to create more relevant services and products which are not just digitally managed and delivered, but which have been born and incepted from digital roots.
Understanding the five key stages of recovery to optimize new growth
The IDC and Huawei whitepaper will map out the five key stages of recovery based on IDC's observations, covering the stages of COVID crisis, economic slow-down, recession, return to growth and next normal. For each of the stages, IDC will map out the impact and characteristics of each, and IDC's recommended direction and strategies that banks should implement in order to maximize the potential benefits that can be attained.
Banks reacting to the COVID crisis and economic slow-down phase have already rolled out a host of strategies including a focus on mobile app efficiency and features, behavioral analytics to capture new customer activity and behaviors during unusual times in order to rebuild models, and branch transformation to better service customers in the absence of physical locations in areas such as lending, further accelerating the transformation towards fully online banking products.
New capabilities and priorities already highly visible in the industry
The new capabilities the banks have equipped themselves with are in the context of the unique characteristics of this 2020 downturn, but are also brought about by the new technology and digital capabilities of our times.
For example, in the earlier stages of recovery, a real impact assessment of the crisis is necessary. The bank needs the ability to understand real capitalization, liquidity & credit positions through various possible scenarios. Stress-testing will have to be kicked into high gear, simulating scenarios based on data from crises of recent vintage. Ultimately, banks will be working towards a transparency of real-time liquidity positions — intra-day dashboards, for example, are now highly valued to give such intelligence. They give banks the ability to remediate quickly and decisively: canceling transactions, reducing outstanding contracts, or settling early.
Next, banks have to update their contingency plans especially for customer engagement. They need the ability to shift to new modes of working and new modes of customer engagement through digital technologies like mobile apps, co-browsing for advisory services, even chatbot services.
Bringing all these capabilities together as banks fight for market share, they need to have the ability to stand out through data-led customer engagement or to use Agile capabilities to iterate on new products and services that enable them to be more responsive to new dynamics post-COVID 19.
Essential reading for bank executives plotting their course for 2020 and beyond
Further expanding on these issues, the whitepaper will explore the future stages of recovery and map the unknowns which lie before the industry through the economic slow-down to next normal phases. The new guidance frameworks will utilize our Resiliency Index which scores banking industries at a regional level based in their ability to cope and rebound from the effects of the pandemic using categories such as ‘channels’, ‘data and analytics’, and ‘workflow processing’ in order to quantify best practices from around the globe as well as their business impact. The whitepaper will prove to be essential reading for global executives at banks as they seek to understand what can be done and what will deliver the most impact as they chart their course into new territory.
To date, Huawei has served more than 1,600 financial customers worldwide, including 45 of the world's top 100 banks. Huawei has also established comprehensive strategic partnership with more than 20 large-scale banks, insurance companies, and securities companies around the world. Huawei becomes a trusted strategic partner for the digital transformation of customers.
Huawei’s annual Global FSI Summit is a global ICT event hosted by Huawei that is focused on partnerships and trends with the financial services industry. It was founded in 2013 and features thought leaders, consultants and experts from the industry. For more information about Huawei Global FSI Summit, please visit: e.huawei.com/topic/finance2020/en/
Source: https://www.huawei.com/en/news/2020/6/whitepaper-huawei-global-it-research-advice-firm