Savings Savings Savings
History tells us that when these types of seismic black-swan-like events happen in society, society moves into a period in which it values things differently. And, values more greatly things like savings, which we certainly haven’t valued as a society in the immediate past.
There’s a general consensus that this will all fuel changes in behaviour, changes in attitude, and it will open opportunities. Savings and the value of savings will rise. That’s going to happen at multiple levels, individual levels and company levels. And probably even government levels. You know because at a company level we will see that the businesses who had a healthy, robust balance sheet are better able to weather something like this.
We’re already seeing low economic markets opening up in places like China, across Asia. Who traditionally were not users of digital, we’re seeing them already starting to use digital. And we’re also seeing audiences above 36, which typically have been slower to adopt digital solutions, are now coming into the fray.
88% of Indian consumers 66 years and above plan to adopt digital payment channels in the next six months. - Hindu Business Line
Banks have been trying to accelerate digital adoption for some time. And, they’ve been doing this because there is a scale of efficiency and there’s a cost-efficiency that comes with digitization and automation. But there’s also an ability to deliver different types of products and services.
Banking The Unbanked
The pandemic is certainly putting a floodlight on inequalities. But I do believe that this again is an opportunity for brands and certainly banks to play a role in accelerating the inclusiveness of the financial system. For example, with our clients Standard Chartered, we certainly have seen a shift even in the last five years that they have been looking for active ways to support and to enable banking the unbanked. So, in places like Africa where you’ll find in the agricultural system, you’ll find growers and farmers are unbanked. They found digital ways to actually enable them to start participating.
Financial inclusion means that individuals and businesses have access to useful and affordable financial products and services. - World Bank, 2020.
This brings more people into the financial system, which in turn assists themselves, their families and their communities.
COVID-19 is an opportunity, particularly for the financial sector, to really live that word ‘human’. What’s more critical right now is to deliver that relationship that is actually going to take those clients from a transactional relationship into a long-term strategic relationship. Putting the clients or the customer at the center of your world. And, only then can you truly be human. Only then can you truly bring solutions that make a difference to people’s lives. Understanding who they are. Understanding what their needs are. Understanding their cultural sensitivities and delivering the type of products and services that they actually need, versus what you’ve got and what you want to sell.
There’s an element of banking that is cultural. Banking is a relationship, and some countries we know have different types of relationships with banks. They’re very loyal. They have a singular bank relationship. Other countries, we find that they are multi-banked.
90% of financial decisions are made emotionally. - Rick Kahler, financial planner and therapist
Beyond this loyalty to banks, whether you’re a loyalist or whether you’re multi-banked. The size and impact of COVID-19 are so huge that particularly if you’re an SME or even if you’re a corporate, you will remember the role that the bank, your bank, actually played to help you out of these dark times. This could breed new types of long-term relationship thinking between companies and their banks. This could open up an opportunity for the banks to become more strategic partners and to think about their clients more holistically. And, step into a role that demonstrates more than just providing that financial instrument but provide some thinking, some future-gazing, some support. This will actually open up opportunities for long-term relationships. That’s ultimately what we all want to strive for.