A new whitepaper by Huawei and the International Data Corporation (IDC) looks at how banks around the world have responded to the COVID-19 pandemic and identifies the way forward in the new normal.

In a report titled Banking Industry Rises up to the New Normal, the two organizations share results of the Banking Resilience Index, which aims to act as an indicator of banking operation and capability for recovery amid the pandemic.

The index quantifies the current status of banking by region in terms of six key measures, and shows the major regional differences. It evaluates each region’s performance and draws out best practices in the post-COVID-19 world.

Findings from the study reveal that China’s banking system is well equipped to adapt, weather and transform its operations to match the turmoil of 2020 when compared to North America, the rest of Asia Pacific (APAC), as well as Europe, the Middle East and Africa (EMEA).

According to the index, banks in China are leading the world in upgrading their banking channels amid COVID-19, excelling in providing fully digital customer journeys, integrated payment services, and more. This has been facilitated by the existing culture of mobile payments usage among customers.

Chinese banks are also leading in innovation acceleration, embracing new technologies including blockchain, distributed ledger technology (DLT), as well as 5G and the Internet-of-Things (IoT). The report notes that most banks in China already have some sort of blockchain or DLT project well underway, technologies that promise to improve processes and efficiencies.

North American banks, on the other hand, lead in communication reformat and efforts to enhance customer engagement using technology, as well as workflow reimagining, which includes components such as the adoption of digital processes, business agility and digital wealth management.

North America’s lead in the communications subcategory can be partly explained by banks’ significant investments into communications and customer engagements. Besides, call centers and related infrastructure to aid with remote banking in the US stand out for their level of sophistication which other regions have not yet reached.

Meanwhile, the EMEA region stands out for infrastructure overhaul, which comprises the adoption of cloud computing and high level of cybersecurity and internal controls. The report also mentions the establishment of clear and open regulation on tech usage in the European Union (EU) which has enabled the emergence of notable fintech firms and challenger banks including Monzo, Fidor and Starling.

COVID-19 accelerates banks’ digital transformation; calls for greater agility

The COVID-19 pandemic has had a significant impact on all economies and all industries. In the banking sector, incumbents have been forced to adopt cutting-edge technology and digital platforms to ensure business continuity, embracing remote working and rethinking customer journeys to address long-lasting behavioral changes.

COVID-19 has highlighted the need for greater agility and shifted banks’ focus on becoming digital innovators as customers around the world demand contactless, remote and fast services via mobile platforms.

As markets like China and others in APAC prepare to return to growth, the Huawei/IDC paper advises banks in these regions to begin placing their focus on future areas of the business which can deliver future results with targeted investments into key technologies.

In particular, cloud usage should be a key area of focus as the technology provides an underlying platform which can scale up other investments and technologies banks made previously.

This is also an opportune time for banks to upgrade their product experiences and engagement methods with customers, and roll out new intuitive products to attract customer, increase stickiness and capture growth in the recovery phase.

The urgency is even more pressing today as big techs and so-called super apps are gaining a foothold in financial services, leveraging their extensive userbase and IT expertise to provide affordable products and deliver seamless customer experiences.

Global technology leader Huawei has been providing a full range of IT and business services to financial organizations around the world, allowing them to reduce costs, increase agility, attract and retain customers, and ultimately, position themselves against emerging competitors.

The firm has served more than 1,600 financial customers worldwide, including 45 of the world’s top 100 banks. It has also established comprehensive strategic partnerships with over 20 large-scale banks, insurance companies, and securities companies around the world.

Huawei is now focused on expanding its engagement with the world’s leading financial organizations and establish an ecosystem that include partners, clients and developers to share experience and successes.

By the mid of 2020, this ecosystem counted more than 29,000 partners worldwide in the enterprise market, including over 22,000 sales partners, 1,400 solutions partners, 4,800 service partners, 1,200 talent alliance partners, and 80 investment & operation and financing partners.

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