There is no doubt that this pandemic will have strong economic impact on every financial institution, specifically on loan demand, deposit growth, credit quality and much more. In the context of the ongoing health crisis here and abroad, a new business model involving high levels of automation and less physical interaction has evolved in the banking and financial services sector. While a lot of businesses and industries are closing or slowing down their operations, the industry for digital companies is growing too fast.
Even before the lockdown, most banks already provide online banking channels. There are also a lot of fintech companies that offer automated delivery and use of financial services including payments, remittances, investments and the like. However, these electronic facilities are not widely used before as it is nowadays.
People are rapidly adapting to the new normal. The regulation to stay home as much as necessary caused the accelerated migration of consumers to digital channels in banking and financial services for their convenience and safety.These led banks and financial institutions to digital adaptation and transformation in their business processes to maintain relevance and ensure operational resilience, since the dependence on these digital channels is expected to continue after the crisis.
Virtually, each banking institution has some form of online banking, available in desktop versions or through mobile apps that offer services traditionally available in local branches. These include but are not limited to deposits, transfers and bill payments. At the consumers’ own comfort and without having to visit a bank branch, they will be able to conduct banking transactions through computer or smart phone and an Internet connection, subject to the usual registration required by the applicable bank, certain limit of amount transacted daily and payment of minimal fees.
Through these facilities, we can transfer funds from and to different bank accounts of the same bank (interbank) or to another bank (intrabank). We can also pay our bills electronically such as electricity, water and telco. There are also some banks that offer online check deposits. Credit card limits, transactions and billing statements can also be viewed as long as enrolled in the online/mobile banking channel. Account opening and loan applications are also made available online with application and identification documents being sent electronically, and phone/web calls (sometimes videoconferencing) conducted for verification and control purposes. Aside from these services, there are also companies (banks or fintech) that offer online investment opportunities. We are now able to buy and sell shares of stocks and mutual funds online.
Going digital is fast and efficient. However, enjoying these services poses risk to consumers, such as online theft of user identity and password, virus attacks, hacking, unauthorized access and fraudulent transactions. This is why we need to be more vigilant. One way of keeping safe is monitoring your account transactions and balances. It is also advisable to keep your records with the bank updated especially contact details and e-mail address. If any unauthorized transaction has been noticed, it is very important to report immediately to the bank.
A functioning banking and payment system is very vital in the global economy. Despite this difficult situation, the financial services industry could contribute a lot of innovative and constructive ideas to boost recovery from this crisis such as using data analytics and enhancing procedures on fraud prevention, cybersecurity and data privacy.
Razzel Ann Vergara is a graduate of BSA at Polytechnic University of the Philippines-Lopez, Quezon and a Certified Public Accountant. She is currently working as internal auditor at the Provincial Government of Camarines Norte.