The pandemic has disrupted consumer expectations. And – generally speaking – banks have done a good job at meeting (sometimes even exceeding) consumer demands. But the evolution is not nearly over yet. Banks will need to remain nimble to move into the new reality stronger than before.

The deep impact the pandemic has had on our lives is undeniable. We work differently; we make different purchase decisions; we spend our leisure time differently; and we interact with others differently. Indeed, when I compare how I “lived, worked and played” before the pandemic to today, it becomes obvious how much my life has changed. I’m sure yours has, too.

While these reflections are interesting on a personal level, the sheer scale, pace and continuous nature of the disruption to consumer patterns and expectations has been life-changing for businesses and banks. Predicting the long-term impacts has been challenging.

That is why, since the initial phases of the pandemic, KPMG International has been surveying consumers to find out about their expectations, preferences and plans. We’ve done half a dozen ‘waves’ of consumer interviews, involving more than 75,000 consumers across 12 markets. We asked them questions about their banking preferences and financial situations. Some of the high level results have recently been published in KPMG’s Responding to consumer trends in the new reality (PDF 2.3 MB).

Perhaps unsurprisingly, the survey found that a significant proportion of consumers are feeling the economic impact of the pandemic. Forty-one percent of all consumers say they are feeling overwhelmed about their financial security in 2021. One-in-six respondents who own a financial product say they applied for a payment holiday in the past 6 months; 16 percent of those say they will probably struggle to pay it back.

The impact on banks will be mixed. On the one hand, this perceived lack of financial security is encouraging consumers to save; our survey found a 7 percent increase in consumers’ intention to save compared to when we asked the same question in the initial phases of the pandemic (a time where, arguably, overall uncertainty was higher). On the other hand, consumer spending is expected to decrease for a net drop in spending of around 21 percent across all categories. So while savings may be up, transactions volumes (and the sales of financial products around those purchases) are down.

While most banks have done an outstanding job at helping their clients make ends meet during this challenging time, I suspect that — over the coming months and years – clients will continue to face ongoing uncertainty. It will be important for banks, therefore, to understand the personal circumstances of their customers, finding ways to help them navigate their challenges while, at the same time, managing their own exposure.

The second big finding of our survey is that trust in banks has faltered somewhat since the start of the pandemic. Other sectors have suffered greater losses of trust. But the results suggest banks will need to increase their communications with consumers, both today and into the future (when debts will need to be collected).

I believe most banks recognize the intrinsic link between customer communications and trust. What worries me more, however, is whether their back-office systems and practices are prepared to handle the large volumes of loans and identify the accompanying increase in fraudulent activity. Thinking through all of the factors that could impact customer trust will be key.

The fact that consumers have shifted en masse to digital is likely not surprising. But the scale and pace at which it has happened is eye-opening. According to our research, 40 percent of banking customers who mainly used in-person channels before COVID-19 have now switched to digital. Evidence also suggests customers are becoming much more comfortable conducing their high-value and complex transactions over digital channels as well.

Again, most banks have done a good job responding to the increased demand for digital channels, products and communications from their clients. And my conversations with bank CEOs suggests many remain highly focused on accelerating their digitization journeys even further, striving to keep pace with the changing needs of consumers.

The most obvious impacts of this trend will be felt in the branch network. City center branches will likely need to remain full-service to deal with complex business and high-net-worth transactions. But any new investment into branches will likely focus on a different regional distribution of branches, perhaps using pop-up branches or multi-brand outlets in order to reduce costs and get closer to customers.

My concern for banks is not necessarily about their physical footprint; my view suggests most banks are already working through those implications. What bank executives may not be thinking about, however, is the challenge of differentiating in a digital environment and the need to find new ways to cross-sell outside of the branch. Both aspects will require banks to think beyond the operational and process lens of this transformation to also consider impacts on areas such as sales and marketing.

What is perhaps most notable from our half-dozen waves of research since the pandemic began is the pace at which consumer preferences and expectations continue to change. And my view suggests we still have some time before the world resets to anything resembling a new normal. Banks will need to continue to remain agile in their efforts to keep pace with changing consumer demand.