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Banks roll out robots as pandemic shakes up IT plans

When banks were flooded with loan requests from businesses struggling with the fallout of the coronavirus pandemic, hastily built robots helped several lenders cope with the deluge.

The bots were one of many quick technology changes deployed across the industry during the crisis, a contrast to the slow progress it’s made in the past two decades to improve technology in the face of increasing competition from fintech rivals.

Now the jolt from the COVID-19 pandemic has accelerated the process even though banks globally are having to cut IT spending this year for the first time since 2009, based on data from research company IDC.

“Bots allowed us to process a much higher volume of applications than we would have been able to do before. It meant the timelines didn’t get longer with the massive volume,” said Simon McNamara, chief administrative officer at Britain’s NatWest, which has granted more than 13 billion pounds ($16.90 billion) of state-backed loans.

It is a pattern that has played out across banks globally, where technology changes that would usually take months were done in a matter of days.

At Citigroup, there was a 300% rise from a year earlier in the number of new accounts opened digitally by corporate or fund clients during March, while the number of those clients using its online and app services rose 25%.

“We were seeing this trend pre-COVID but it accelerated during COVID,” Naveed Sultan, Citi’s global head of transaction banking, said.

“The traditional ways of working became almost non-existent.”

But as banks have to budget for a pick-up in loan losses due to the pandemic, some projects, such as large-scale customer data mining to

offer more personalised services may have to be shelved, IDC research showed.

Global IT spend by banks is set to shrink by 1.7% this year to $200 billion, down from $203.5 billion in 2019, based on IDC data. Growth is then forecast to resume over the next three years, albeit at a slower pace. Reuters

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