The most gruelling
Triathlon for banks
The most gruelling
Triathlon for banks

The most gruelling triathlon for banks

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Author: Roland Papp, Lending Expert, Business Analyst at ApPello

Now, with nearly a year’s experiences of the global coronavirus pandemic under our belts, we can say that ‘unpredictable times’ expresses to perfection not only these days but the majority of last year, too.

This is all the more true for banks: as coronavirus spread, the economic downturn became immediately evident, as a consequence of which feverish calculations began as to what level of damage would be caused by those sectors that appeared on the verge of collapse (hospitality, retail, tourism), or indeed whether there would be a domino effect… Analyses published so far indicate that within the European Union, the crisis has hit banks in the Central-Eastern European region particularly hard – recovery will be the next big question but for the moment, everyone is being extremely cautious as far as specific forecasts and estimates go.

The introduction of a repayment moratorium to aid the liquidity of retail and corporate customers also represents a considerable headache. In the EU, the repayment moratorium was a general tool of economic protection a while back. Hungary differs from other Member States in that here it automatically came into force, it was not an option.

The series of challenges were compounded by the responsibility to work remotely: overnight, banks found they had to keep in touch with their customers online and they were also forced to operate their organizations day to day in a similar way. As a consequence of the quarantine and the forced shutdown, tens of thousands of customers switched to online from one day to the next. Naturally, the greatest proportion of ‘migration’ was to do with arranging daily banking matters, precisely at the time when masses of customers were contacting their banks regarding a variety of issues.

Similarly to customers, financial institutions also found themselves pondering numerous questions:

  • how should they manage non-paying loans, how should they identify customers?
  • How should they approach the situation where, in certain sectors, bankruptcies increased exponentially in just a few weeks?

Parallel with this was yet another challenge for banks, the majority of employees started working from home. But even this raised numerous issues:

  • how can an employee work efficiently?
  • Is teamwork actually possible online?
  • How can employee welfare be provided?

Thus the banks found themselves facing a triple challenge: 

  • a business environment in sudden decline
  • the immediate implementation of the loan moratorium 
  • & accelerated digitalization. 

Responses had to be supplied to all these hurdles in such a manner that trust in the banking system was not shaken for even a single second because that never brought positive results.

Furthermore, the matter of IT security is yet another risk. The fact is that the more online the environment is, the greater the threat (just how secure is the laptop of an employee working from home?). And although digitalization born out of necessity may be the path of development for banks (at least for many), at the same time this also leads to rapid growth in cyber-crime, not to speak of those cases where the role of the bank and its possibilities in the relationship between bank and customer only extend to a certain degree, past which all responsibility falls on the customer (for example, the degree of protection of the network that he/she uses the mobile bank application on).

It may be difficult to believe, but the fact is that today, more cyber-crime is committed than ‘traditional’ crime.

Banks have become the number one target. And it hardly needs to be said that in this environment it is necessary to keep up with rapidly changing consumer demands (adjusting to digitalization):

The mobile telephone is (and will be in the future) the primary and only ‘banking’ tool of customers, they arrange everything on this device starting from taking out a loan through payment and document application to bank transfers, all this supplemented with a general switchover to contactless banking.

It would be difficult even to list all the related tasks and complex problems seeking solutions, which banks must face up to these days. What is more, this is not a matter to be resolved in some distant future but rather today.

Luckily, ApPello is a tried and tested solution to all the abovementioned problems, whether migrating to the cloud, digital customer identification, or establishing a mature, secure environment on the most popular channels

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