Digitalization in The Banking Industry : Adapting to The Crisis

Abstract: Research problemThe world is currently undergoing one of the most substantial crises of the past century, causing disruption both socially and economically. The effect on the Swedish inhabitants has been impactful, especially for elders, who are crippled in the ability to complete necessary tasks including private banking. Many elderlies are struggling with online banking and similar fintech services, so when the rest of the population resort to digital means of conducting bank errands, what are banks doing to smoothen the transition for elders? Research purpose The research purpose is to explore how commercial banks are bridging the digital divide between information technology and the senior customers and further how the immediate crisis complicates this. The thesis will explore the practical efforts toward smoothening the transition between an increasingly more digitalized bank sector and the older generations. Additionally, to provide insight to how the covid-19 pandemic influences commercial banking and what trends are following. Theoretical framework The theoretical framework has been modeled around five concepts relating to digitalization: Digital divide, the bell doctrine, E-banking, The profitability of traditional vs. modern banking and E-CRM. The theoretical framework is presented in full extent in its own section. Methodology A qualitative method is applied with emphasis on narrative inquiries collected through semiconstructed interviews. Empirical findings The findings are presented as thematic extracts from the interviews, anchored in the theoretical framework, consisting of primary data from five participants from four separate banks in the Umeå region, Sweden. Conclusion The local banks have been very successful in providing their non-digital customers with their services by being flexible and offering a broad range of channels through which the customer can interact with the bank. For the most part, the banks themselves remain largely unaffected by the crisis. Naturally, there are a few customers who still resist, or do not possess the ability to utilize the digital tools that has become the primary way banking matters are conducted at this time. Additionally, it is possible that the outcome of the crisis will have resulted in an increasingly higher rate of adaptation of digital banking, hence making the traditional business model more difficult to operate post-crisis.