The Important Role of Financial Institutions in a Time of Uncertainty

As the economy brings disruption, banks and credit unions are beacons of stability

The after-effects of COVID-19 are still creating disruption across the world. While some industries have been highly vulnerable to the resulting economic shifts, financial institutions play a key role in helping our economy and communities get through the current turmoil and prepare for a strong return.

By serving as leaders in a dynamic and uncertain time, financial institutions are not only doing the right thing, they're also creating a stronger future for themselves and their communities. How banks and credit unions act now has the potential to determine their place in local communities in the coming decade.

From immediate actions that focus on keeping their businesses running smoothly to mid- and long-term plans for helping staff, customers and members navigate the ever-shifting complexities of this new environment, four key objectives are top of mind for financial institutions.

1.  Maximizing Effectiveness in New Working Conditions

COVID-19 brought incredible disruption to the way we all live and work, and it'll never completely go back to the way it was. Many financial institutions are allowing employees to work from home, which can introduce new risks that need to be effectively managed. Actions may include reviewing remote network access needs and security coverage to identify areas of vulnerability.

Financial institutions may also consider upgrading collaboration tools. Technology can help streamline processes and ease frustrations of staff members so they can better serve customers and members. For example, introducing a digital tool accountholders can use to schedule appointments with a loan officer, in addition to a platform the loan officer can use to host virtual meetings, can make the entire process run more smoothly.

Or, banks and credit unions that run their technology stack in-house may consider outsourcing to a managed technology model. Similarly, the value of using robotic process automation and real-time fraud solutions to lessen reliance on human intervention for critical processes is clear.

2.  Building Trust Through Strong Communication

Communication is key, and a financial institution's ability to reach customers or members with important updates about their accounts, digital banking and payment options, and safety and security measures will help build trust. Real-time alerts can deliver critical updates through email, text message or mobile push notifications, based on preferences set by accountholders. Additional updates can be broadcast through in-branch signage, social media posts, updates to scripted phone menus, account statements and website banners.

Multiple methods should be considered for communicating digital options to manage financial tasks from home. Video tutorials and e-learning options can help first-time users become comfortable navigating a mobile app, for example. Instant-messaging support options can provide a quick alternative for staff to answer questions and troubleshoot problems.

In addition, banks and credit unions should consider adjustments to ATM and remote deposit limits. Clearly communicating any changes can prevent accountholders from coming up against restrictions that result in frustrated support calls. Those efforts will help deepen relationships and keep call center volumes manageable as consumers and businesses adopt more digital services.

3.  Re-evaluating Digital Capabilities in Light of Social Distancing

With branch visits minimized, a financial institution's digital presence is truly the face of its organization. If you haven't already, now is a good time for banks and credit unions to take stock of their websites and digital tools, refreshing as needed or adding perks such as credit score monitoring to help accountholders feel reassured in a time of increased fraud.

Digital capabilities make accountholders' lives easier. Adding new features that drive digital engagement can create lasting shifts in use and adoption of lower-cost digital channels.

4.  Protecting Against Heightened Risk and Fraud

Unfortunately, fraud thrives in times of uncertainty. It's critical to have safeguards in place to protect assets from criminals looking to profit from the theft of sensitive data or the threat of shutting down a financial institution's operations. Layered cybersecurity with 24/7 monitoring, management, detection and response is key to protecting the entire IT infrastructure.

Equally important is securely accommodating the growing volume of digital banking activity without sacrificing the convenience of frictionless self-service. With more people interested in opening accounts, enrolling in online or mobile banking, or resetting a forgotten password from the safety of their home, managing account fraud and debit risk is more important than ever.

Data sharing between banking channels and across financial institutions can help pinpoint fraudulent activity. Real-time alerts can help accountholders monitor for fraud, using notifications to track account activity and report suspicious activity immediately.

Part of the Solution

Elements of today's economic climate are reminiscent of the financial crisis of 2008. In that recession, banks suffered criticism for playing a role in contributing to the crisis. This time, financial institutions have an opportunity to serve as beacons of stability and reliability.

Many are already taking steps to defend against growing fraud concerns, ensure the smooth adoption and utilization of digital tools, and support small businesses and individuals who are financially affected. Those important actions will help stabilize local communities and distinguish financial institutions as pillars of their communities for years to come.