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The State of Banking in 2020: Year in Review

By all accounts, 2020 was a year like no other.


At the time of this writing, the coronavirus pandemic continues to impact communities, business owners, and economies of every country around the globe. The banking industry has responded promptly and efficiently to unprecedented change, rising to the challenge of providing stimulus checks to consumers in an environment of daily flux.


However, as challenging as the year was for financial institutions, 2020 has also expedited significant forward progress within the industry. The acceleration to and for digital as a result of the pandemic, the impact on bank operations as remote work becomes widespread, and the dramatic growth in bank deposits are a few key themes that come out strongly. Simultaneously, the shift towards personalized banking products and services aimed at responding to customer needs has come out stronger than ever.

We’ve asked four of Zafin’s Executives to reflect on the world of banking in 2020. Introducing:

Alexandra (Alex) Roddy, CMO & EVP, Partnerships

V Bala headshot temp Venkataraman (Bala) Balasubramanian, CTO

V Bala headshot temp Gabriel Leiva Von Bonet, EVP, Sales

V Bala headshot temp James Redfern, Director, Sales

How do you look back on 2020?

Alex: 2020 was hard on all of us—as individuals, families, parents and children (particularly children of elderly parents and grandparents); as students and workers; as communities and countries; as frontline and non-frontline workers; as for-profit and not-for-profit organizations. By March of 2020, every plan and every playbook for the year had become irrelevant. Three things that many of us cultivated in this unprecedented year: resilience, flexibility and empathy. Is there a silver lining from the year that most would rather forget? Absolutely. Let’s hope that resilience, flexibility and empathy continue to flourish, making us better and stronger as communities, companies and countries, even as the tiny virus that launched a global pandemic succumbs to the world’s most welcomed vaccine.

Bala: 2020 was the year that showed the best and the worst of humanity. While health-care and front-line workers toiled non-stop bringing care, compassion and comfort all the while innovating and seeking a cure, governments and financial institutions tried to enable an environment that allowed for ‘movement while standing still’ giving agility a new meaning. The year also saw us become far more local than global. But, as with all significant challenges, opportunities arise and abound. Technologies to enable us to stay at home while being productive at both work and entertainment brings about fundamental changes that will be enduring. Agility in terms of being hyper-responsive has also taken root. Finally, innovation that dares us to imagine new ways of working, living and contributing has taken hold.

Gabriel: It is definitely a year that we won’t forget. I remember hearing my father in law about the impact of WWII in his childhood years, how he lost his father and uncles, the food shortages and the movement restrictions. I know our pain hasn’t been anywhere as bad, but I never thought that I would experience anything even similar. On the positive side, it has proven the importance of personal and business agility. Nobody seriously predicted this situation and hence being able to learn and make decisions quickly, guided by a sense of purpose and leveraging flexible teams of people and modern technologies has helped many organizations cope with or even succeed in this environment.

James: I look back on 2020 as a year of learning. In our lifetimes we have not seen anything with this level of global impact. On a human note, this has been a time of reflection for many but also a time of loss and stress for many, so we need to be conscious of that in our day-to-day interactions. From a business perspective it has also seen rapid changes, moving at speeds I have never seen in the banking industry and there will be a lot of learnings coming from it.

How do you think banks have responded to the challenges they have faced in 2020?

Alex: Banks have done a tremendous job serving their customers and communities in a time of need, facilitating digital banking and remote work at a level well beyond what they had prepared for, and incorporating learnings from an unprecedented year into go-forward plans and strategies for accelerated digital transformation from the bowels of the back shop to the tip of the spear in customer acquisition. There is no longer any reason to describe the industry as “stodgy” or similar. This is an industry that understands what customers need, and knows what a prosperous future will look like.

Bala: Banks have taken an interesting three-pronged approach to respond to this unprecedented crisis. They looked inwards to protecting their employees through the deployment of technologies that insured their well-being while productively contributing to a new dynamic. They looked outwards to ensure they can meet the needs of their customers and communities in this new way of serving remotely while appearing local. They looked deeper inwards at their systems and technologies to drive innovation into processes and technology that will be sustainable.

Gabriel: I would look at it from two angles. As a customer and citizen, I say they have done a pretty good job, launching comprehensive programs to make a positive difference for those who need their help and support. In Canada, they implemented relief programs for mortgage and credit card payments, access to emergency benefits and low and no-interest loans to small business customers. As an investor, I say that the jury is still out. Banks have shown their resiliency in coping with low-interest rates and operational disruptions but have shown their weaknesses related to inefficient processes and lack of digitization. The reduction in valuations has been moderate for Canadian banks but significant for US and European ones.

James: After the initial bumps that understandably hit every industry in the early part of the year, I actually think that banks have responded well and the initial surveys are saying the same. Getting branch or call centre based staff working from home has been a massive logistical and IT challenge, but one that most institutions have responded well to. A lot of digitization work that was underway has accelerated, some of which is digitizing existing processes rather than re-thinking them, whereas I believe a true digital experience is designed from the ground up. So this is where I believe the industry could do better and will need to revisit in the coming months/years.

Looking a decade into the future, do you think we will see the COVID-19 pandemic as a speed bump or a true inflection point for the industry?

Alex: I think we will view 2020 as an inflection point in the way the world works in banking and beyond. Every industry was already on some kind of flight path to end-to-end digitization. What were formerly conversations about the feasibility and advisability of full digitization— encompassing back-office processes as well as front end experiences—have turned into conversations about the digitization imperative. Cloud computing is no longer an “if” discussion, but instead a more urgent discussion of “how.” And AI is no longer a futuristic experiment but a vital means for delivering meaningful customer experiences and managing risk in a rapidly digitizing world.

Bala: The pandemic will certainly cause the pendulum to swing quite a ways away from the norm and reversion to the mean will amount to the setting of a new normal. For technologies and business models, this is certainly an inflection point. For certain businesses, it is likely to serve as a reset to a new normal: commercial real-estate, employee sourcing to name a few. For governments looking at entitlements, a new normal is set to take hold. The impacts these create on the industry will certainly be lasting and redefine the path forward. I expect to hear ‘hybrid’ in ways we haven’t quite heard before: hybrid work environments that combine home base with office space, hybrid clouds (that do exist today but become the norm), hybrid employees through greater use of robotic workforces, hybrid products that combine financial and non-financial products creatively and so on. The incremental nature of innovation will give way to a culture of experimentation that creates the required agility.

Gabriel: I agree that the pandemic creates an inflection point. Banks have focused in the past on financial risk, they will be spending much more time and money managing non-financial risks. This, combined with client expectations and competition, is accelerating the digital transformation and innovation. Banks will also accelerate the migration to the cloud to increase cost efficiency and agility. At the same time, the increase in cyber-attacks against banks will raise the importance of cybersecurity even further.

James: Financial institutions were already moving along the digitization route, albeit at different speeds with some more advanced than others. The pandemic has accelerated it and in fact broadened its reach. What I think it has also brought to top of mind are some of the failover, system redundancy conversations, that may not have been given the attention they deserved, so you are seeing an acceleration in the acceptance of cloud-based solutions and low to no-touch banking, with the knock on system and human impacts of these.


In part two of our discussion with Alex, Bala, Gabriel and James, we asked them about the banking trends they foresee in 2021.