With branch operations at banks turning out to be challenging in the current Covid-19 pandemic, a new report has said that lenders can use this as an opportunity to transform themselves in areas such as cost optimisation, digitalisation and productivity, and become resilient, agile and profitable.
The report by PwC India on ‘Reimaging Indian Retail Banking: the Impact of Covid-19 and Way Forward’ said that banks would need to focus on five areas including branch hour expansion, sales and service planning, leveraging digital assets, optimisation of operational costs and leveraging existing data.
Rethinking strategy
“With severe restrictions related to social distancing in place, banking operations are expected to change in the future. Banks need to rethink their strategy in order to be more effective and customer friendly,” it said, adding that banks need to slowly educate and help their customers to slowly migrate to digital channels, without compromising on their convenience and comfort.
In terms of branch hours, the report has proposed adjusting branch hours, staffing mix and timing, switching to appointment-only visits at some branches and defining ‘golden hours’ at the beginning of the day to serve vulnerable segments.
It has also proposed redeploying higher manpower towards sales and providing customers with an online token system for appointments to reduce crowding.
For leveraging digital assets, the report has suggested providing online and offline tutorials to walk-in customers and developing product application end-to-end journeys online for direct and assisted sales.
It has further proposed that banks would have to budget for increased hygiene and sanitation costs, may also have to negotiate on vendor and rental services and consider intelligent automation tools.
New challenges
The report has noted that banks will need to adhere to the guidelines on social distancing and safety precautions in their branches and offices.
“This can create challenges such as decline in revenue generation due to lower customer footfalls, lower demand, reduced and remote working of staff, likely stress on net interest income owing to skewed interest expense, requirement of additional provisioning owing to an increase in expected stressed assets, higher costs for ensuring ‘lights on’ operations,” it said, adding that lenders will need to look at short- and mid-term tactical initiatives during the crisis, along with focusing on long-term strategic initiatives.
As many as 11 bank employees have lost their lives to the infection in the Mumbai metropolitan region.