Charting the Uncharted Triggered By COVID-19 for Banking
Part 1: Framework
The impact of the COVID-19 pandemic is still unknown—the world is moving into a new time of economic and political uncertainty which will have far-reaching consequences. Consumer and business behavior will shift permanently in many ways, ranging from greater reliance on digital engagement to third-party financial guidance.
The initial shock and aftershocks of the pandemic will force financial institutions to rethink their long-term strategic objectives, retrenching in certain areas while accelerating in others. In addition, FIs must critically examine their business and operating models.
To assist FIs in the development of their COVID-19 response, the Celent Banking Team has compiled a three dimensional framework:
- Scenario (severity)
- Area (business model, operating model, and tech investment plans) and underlying drivers
- Timeline of implication/response
The framework is not prescriptive—there’s no way of knowing what will happen.Rather the objective is to help guide FIs’ thinking regarding these areas.We focus on what could change from our pre-COVID-19 expectations.
Within the framework, we list implications informed by discussions with our FI and tech clients and extrapolations from our cumulative years of experience tracking tech trends across economic cycles and crisis.