The beginning of FY 2020 witnessed 10 Public Sector Banks (PSB) amalgamating into four capital rich banks. This gave these PSBs the much-needed impetus to support the financial needs of larger enterprises that in turn would help provide a push to the growing economy.

However, before this could yield any positive results, the world was confronted by the novel Corona virus. The pandemic impacted all aspects of the society and it unfolded as surprisingly for the BFSI industry. Having fallen under the ‘essentials category’, it became crucial for banks to ensure safety of the people, along with ensuring continuity of business and providing consistent and transparent financial reporting to stakeholders. 

Where economists predicted a significant economic downturn, the GoI & RBI came forward and gave a helping hand to the sector by introducing various economic and fiscal stimulus measures to tide over the testing time. These measures aimed towards sustaining the economy, the banking sector and eventually, the people.

In a conversation with Asha Kharga, Executive VP & Group Chief Marketing Officer at Axis Bank, she explains how the industry navigated through this unprecedented time, bank's communication strategy during the crisis, technology tales and future recourses.

Excerpts:

Q. What were the challenges & opportunities for the banking and financial services sector post-COVID?

Several Banks, in fact, have been facing challenges even before the pandemic, like rapidly rising customer expectations, new technology, and higher costs of operation. COVID-19, with the health, humanitarian, and lockdown crisis it came with, did bring a completely new set of challenges to banks. Large and small businesses were badly affected, individuals’ ability to repay loans reduced, and quite a few key sectors that drive Indian economy were severely impacted. Discretionary spending in the initial months had hit a new low as overall consumer sentiment dipped, owing to the economic shock of unprecedented proportions. And in many Banks general technical and operational challenges both for employees and customers, highlighted the lack of agility or preparedness on several fronts in Indian banking system in dealing with emergency situations.

However, on the positive side, the heightened sense of safety and hygiene, physical distancing has accelerated macro trends such as a deeper emphasis on digital platforms and technologies to both service as well as to engage with our audiences. It is an opportunity, and imperative, for banks to modernise legacy-banking platforms and innovate further to meet consumers’ growing preferences for digital alternatives that can be seamlessly integrated in their new normal – tech enabled customization in processes, requisite hardware and software tools, online channels etc.

Q. What communication strategies did you employ, both internally and externally, to grapple with initial jolts?

We lived true to our brand philosophy – the spirit of being OPEN. It was genuinely a test of remaining open in minds and hearts when the nation was shut. We pivoted our communication strategy at the onset of pandemic to focus on messaging that is empathetic (and not humble hype) and brought positive feelings and outcomes. At a time when small-scale vendors across the country were facing serious impact amid the closure imposed due to the pandemic, we launched a new campaign, #ReverseTheKhata encouraging people to come forward and support those in need. With this simple message, reinforced in all regional languages, the campaign topped Twitter’s #Bestostweets 2020. This was about an authentic initiative of making people open the purse strings of their hearts and helping those who were more vulnerable.

We urged consumers to adopt contactless payments, which is a safer way to pay, not just for their safety but also for others with #TapKeLiyeClap. As digital transactions increased, we stepped up relevant campaigns around Safe banking and promptly activated them. All of these campaigns were driven through appropriate digital platforms.

The pandemic also made us re-imagine how we communicate with our employees. Keeping morale high, communicating with transparency and consistency was the need of the hour. Our leadership team stepped up to engage and inspire our front-line staff who have been working tirelessly during the lockdown as a part of essential services.

Our #DilSeThankYou film saluted the indomitable spirit and strength as our branch staff along with other frontline worked who continued to remain available in the need of the hour.

Q. Would it be right to call this an inflection point for the BFSI companies? Or any silver linings that you see?

It is definitely an inflection point for BFSI as changes are being bought about in the way banks engage with their customers, assess and lend to customers, look at cost optimization and accelerate digital transformation. Some existing trends will be accelerated, some will get reversed, at least temporarily, but all of them will have a new agenda post COVID-19.

Digital transformation has been accelerated, both with digital transactions taking a bigger share as well as its impact on sourcing of products. Safety and hygiene concerns are leading higher adoption of contactless transactions with no PIN required now for transactions up to Rs.5000. We saw a 700 bps increase in our contactless transactions post the lockdown.

When things return to normalcy in some form, all these efforts will allow the industry to capitalize on the digital transformation agenda being put in place now.

Q. How helpful was technology in navigating through this time?

We had been investing heavily on building digital capabilities over the last couple of years, and this came in good stead as technology became the biggest harbinger of change through these times. Our mobile banking app, which has been one of the highest rated app saw its market share doubling in mobile banking transactions, and as much as 88% of bank’s overall transactions are digital now. Today 71% of credit cards are sourced though digital channels and as many savings accounts are opened through tab banking.

With technology breaking physical boundaries, we also launched some of the most innovative products and services for our consumers. A Full Power Digital Savings account was launched that can be opened instantly with Video KYC. With small merchants ready to embrace digital payments, SOFT POS which converts a smart phone to a POS machine was rolled out.

Q.  What changes are BFSI firms bringing about to stay ahead of the game?

As we know, COVID-19 has made digital transformation more relevant and urgent than before. All the opportunities that banks hoped to have years to get ready for, are quickly approaching and previously slow-growing pain points are being pushed to the surface. To meet these challenges, banks have to innovate aggressively on customer experience.

Digital will continue to be a key focus area not just for us but the entire industry. Consumers have embraced digital like never before and are expecting banks to stay ahead of the game and provide them similar digital experience as other sectors like e-commerce, streaming apps and to do so digital transformation needs to be brought about at scale. Newer technology like AI and machine learning are starting to play a role across the spectrum of banking operations.

Above all, we firmly believe that the success of institutions will also come from a shared-success mindset – build an ecosystem in which customers, employees, governments, partners, and the public in general will create new opportunities for growth in a way that benefits everyone.