Black Swan Events: Lessons Learned From COVID-19

“By acting on consumer preferences, technology adoption and macro- trends — not simply paying lip service to them — financial institutions will be far better prepared to weather these types of transformative disruptions,” Jumio Chief Product Officer Philipp Pointner told PYMNTS. Learn how Jumio uses digital channels in Black Swan, a special report from PYMNTS.

The following is an excerpt from Black Swan, contributed by Jumio Chief Product Officer Philipp Pointner.

Black Swan Events: Lessons Learned from COVID-19

One of the biggest lessons from the COVID-19 pandemic is how important it is to stay ahead of the digital transformation curve.

We’ve seen mainstream banks such as HSBC and Lloyds shut down scores of branch offices as they try to shift more of their business online. For some financial institutions (FIs), this is an easy switch, because they’ve already made the investment in digital channels. But for those who haven’t, the last few weeks have been a nightmare.

“The value of digital channels, products and operations is immediately obvious to companies everywhere right now,” said Sandy Shen, senior director analyst, Gartner. “This is a wake-up call for organizations that have placed too much focus on daily operational needs at the expense of investing in digital business and long-term resilience. Businesses that can shift technology capacity and investments to digital platforms will mitigate the impact of the outbreak and keep their companies running smoothly, now and over the long term.”

As consumers’ needs and preferences evolve based on the technologies and apps they use every day, FIs must adapt their offerings to meet these evolving expectations. Technology can enable these organizations to better utilize an already stretched workforce to work more effectively with their customers. The following five areas will help transform these organizations and better enable them to react to black swan events.

Omnichannel Engagement

While some customers may want to engage with their banks in traditional brick-and-mortar offices, a growing number want to communicate through online webchats, via apps on their mobile phones, by telephone or through other online services.

Digital Onboarding

During a pandemic, no one is marching into a branch office to open an account, so they’re turning to online channels. Sadly, between 40 percent and 50 percent of online applicants abandon the application process because the onboarding and identity verification process is too clunky and time-consuming. Organizations that have transformed and expedited the new account setup process are realizing dividends now, as they’re able to capture more customers and a greater ROI on their marketing investments.

Mobile-Friendly Functions

Digital transformation means leveraging mobile apps that allow their customers to do things like deposit checks, transfer money, view banking transactions, set up budgets and alerts or even pay for merchandise, right through their smartphones or smartwatches.

eKYC and AML Compliance

For most financial institutions, digital transformation begins and ends with compliance requirements. Organizations with antiquated systems and processes find it more difficult to be compliant in many situations, especially when it comes to reporting and auditing. Digital platforms lend themselves well to these requirements and deliver better customer experiences.

Adaptive Workplaces

FIs are slowly embracing this need for variation by providing a digital environment that allows employees to work and be productive from wherever they need to be. Having adaptive workspaces leads to much greater productivity and increased health and well-being for employees, which dramatically cuts down sick days and increases retention, not to mention creates a positive and thriving work environment.

By acting on consumer preferences, technology adoption and macro-trends — not simply paying lip service to them — FIs will be far better prepared to weather these types of transformative disruptions.

Read more executives’ insights on the COVID-19 crisis in Black Swan.


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.