Here’s how the corona pandemic is already changing the financial services industry

Yext hosted a number of panel discussions with managers from leading marketing and digital companies across different areas of financial services to understand the impact of the Corona pandemic on the financial sector. In these discussions, we were able to outline findings from our research on industry trends and tell executives about the impact of the Corona pandemic on their businesses. Also discussed were changes in customer behavior and best practices for dealing with these new realities.

Financial services respondents anticipate the following impact of the Corona pandemic on their businesses:

  • 43% of respondents report record levels of business activity and performance
  • 14% report a sharp increase in activity, which has since dropped off again
  • 29% report some positive, some negative impact on a variety of areas
  • 14% report a predominantly negative impact

The Corona pandemic has profoundly changed the financial services marketplace. On 22. January, the U.S. officially confirmed the first infection with the novel coronavirus. What followed was a wave of macroeconomic and legislative impacts on all industries in the financial services sector. First, regulations were introduced on domestic isolation, which particularly hurt the travel and hospitality industries. Then the crash in oil prices began. On 23. February was also followed by the crash of the S&P 500. In response, the Federal Reserve System decided to (U.S. Federal Reserve System) on 3. March an interest rate cut to stabilize national liquidity. The result was a boosted mortgage market, leading small and midsize businesses to borrow heavily under the Coronavirus Aid, Relief, and Economic Security Act prompted. They can hardly process this information? This is how many of us feel, the economy was finally completely off the rails for weeks .

This illustration shows how one event led to the next. So customers took advantage of low interest rates to refinance their loans and investors had to adjust their portfolios accordingly.

A number of studies have examined how financial service providers are dealing with the COVID-19 pandemic. Here's what we heard [from financial services executives] in a recent Yext panel discussion:

  • 71% of executives surveyed said that a reassessment of all strategic priorities and plans was taking place in light of the new Corona pandemic situation
  • 57% say they are looking to cut costs
  • 29% report planned investments in the digital sector

Gartner corroborates the above findings with its own study, according to which companies are shifting spending on media in order to invest the budget saved in communication and interaction with customers and in supporting their own workforce.

We would like to present some of these messages to customers here as examples:

  • Update of the availabilities resp. Temporary closures/absences of individual departments, offices or financial professionals
  • Specific notices under the COVID-19 pandemic, such as separate hours for seniors, security measures in business premises, etc.
  • Prioritize digital services or contactless transactions, z. B. Online booking for appointments, collection facilities, online banking and trading
  • Frequently asked questions about important announcements, such as those concerning small and medium-sized enterprises, mortgages, deferment of payment, or regarding. Assistance programs for customers and employees

Customers don't need promotional offers now, they need immediate support for critical business transactions. This is where it becomes apparent which companies can be relied upon and which cannot – who is coming up with innovative solutions and who is missing out on developments.

Without a doubt, we are dealing with a continuing development, the economic impact of which is far from being at an end. However, many leading financial service providers have already accepted the new realities as normality. 71% of executives surveyed believe that the Corona pandemic will have a lasting impact on customer behavior, while the remaining 29% are optimistic that old patterns will return. Currently, a wide variety of business strategies are being tested and, especially in light of changing business processes and interactions with customers, financial services providers are asking themselves questions such as:

"Have our financial cuts or our move to digital processes come at the expense of human interaction?"

"Did our company's strategy promote or inhibit adaptation to industry trends?"

"Do we still offer our customers sufficient opportunities to get support and do business?"

Financial service providers can introduce innovations quickly – it's practically in their blood. Among other reasons, this is why at Yext we particularly enjoy working with brands in this sector. The future will show that especially companies in this industry benefit from agile structures.

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