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More than two thirds of Russian banks are about to cut their OPEX in 2021
While 67% of credit institutions expect their business to grow
The past year has become another trial for the Russian banking system, but the industry did not collapse - the banks turned out to be much more prepared for the current challenges than before. The events of 2020 have become a catalyst for the digital transformation of customer service, banking processes and products. These are the conclusions of a joint survey by EY and the Russian Banks Association “How will the experience of 2020 affect the future of the Russian banking sector?” The survey was conducted among top managers of Russian banks.
Despite the fact that 100% of respondents noted that the banking sector was impacted by the pandemic, at the end of 2020, this impact was significant for only half of the banks. Large banks (mostly state-owned) with assets of more than 1 trillion rubles suffered from the most noticeable impact of the COVID-19 crisis, while for smaller banks this effect was less severe.
In 2020, digital technologies have become one of the key tools for optimizing banks' costs and improving the quality of services provided. To achieve these goals, banks plan to continue developing digital channels of interaction with customers, whereas the share of products processed through remote channels will grow rapidly. The regulator will continue to play an important role in the development of digitalization, actively promoting at the legislative level such projects as the Faster Payment System (FPS) and biometric data utilization to provide financial services remotely.
Many banks are revising their existing business models, primarily resulting in the product line reduction, organizational structure simplification, flexible approach to internal interaction and cross-functional team work. As measures to improve operational efficiency, most of the respondent banks plan to develop IT systems and improve the business processes efficiency, including through automation.
Telecommuting and cross-functional communication have become a viable alternative for banks around the world to traditional ways of working. After the lifting of restrictive measures related to the pandemic, most Russian banks plan to keep a remote work model for certain categories of personnel. 68% of banks plan that some of their employees keep working from home in the future. Only a limited number of banks have identified branch network and office space optimization as a priority for 2021. At the same time, the format of the branches themselves and the products and services provided therein will change significantly.
Sources: EY and the Russian Banks Association