Jayakumar Venkataraman, Managing Partner, Europe, Financial Services and Insurance at Infosys Consulting:
“For almost a decade, banks have been operating at low rates because of the Bank of England keeping rates significantly low, impacting their ability to drive substantial revenue growth.
“The difficulty today is that we have a whole generation that has become accustomed to low interest rates and high borrowing. With the sudden switch back to high rates, borrowers will need to get used to servicing their level of borrowing at these high rates or reduce their borrowings to a manageable level.
“During this period of adjustment, it is likely that customers may experience varying levels of financial discomfort and distress, meaning banks need to step up to the plate when it comes to leveraging the data and predictive capabilities of AI and ML to identify early signs of trouble. Banks must become proactive in reaching out to customers and supporting them through appropriate advisory and restructuring of their financial liabilities. Thereby providing empathetic customer experience, especially during these times of financial confusion.
“With the financial squeeze tightening for many consumers, banks need to ramp up investment when it comes to educating customers on how to manage their finances too. This includes informing customers on various borrowing options or alternatives that fit their personal situation. We can expect to see banks evolve from mere transactional hubs to centres of consultancy – advising on what options are available to restructure debt, and offering solutions better suited to individual cashflows and business needs.”