We found that the pandemic accelerated the digitalisation of customer interaction by an average of three years and banks’ share of digital offerings by seven years. [1] However, at the time, we were also beginning to see the effects of digital transformation fatigue and explored the strategies that the world’s biggest banks were deploying to become more agile and customer-centric. Now, a year later, the landscape facing banks has changed dramatically. The covid19 digitalisation boom has come to an end, and the industry is preparing for a global recession. At this crossroads, it is important to take stock of the progress and outline the challenges that the digital transformation of financial services will have moving forward. With this purpose in mind, this article revisits the strategies that we initially outlined in our series and investigates the potential impact that recession will have on their development. We will aim to better understand how recession is tipping the scales between front and back-end innovation, the role that banking ecosystems can play in navigating some of the forces shaping the recession, and how central banks’ response to the crisis could create the grounds for a new set of industry players. Ultimately, we argue that while the crisis the world is experiencing now is very different from the 2008 global financial crisis that unleashed the last wave of fintech expansion, the path towards digitalisation will continue its course, inviting new players into the industry and leveraging new technologies to transform the operation and provision of financial services.
[1] https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/how-covid-19-has-pushed-companies-over-the-technology-tipping-point-and-transformed-business-forever
