May 12, 2020
Griffin Maloney, Vice President of Business Development at Williams Lea, explains why financial services firms should start looking ahead, post-COVID-19, to build a risk-resilient business.
The COVID-19 pandemic and the subsequent economic fallout caused by mandatory closures of non-essential businesses were impossible to predict. Within weeks, the financial sector saw business strategies rendered obsolete and operations shuttered.
Now, after months of re-working business continuity plans to mitigate the impact of the pandemic, initiatives are underway to gradually open the global economy. As we gear up for this next phase, I thought we could take both a glance back at how financial services firms responded to operational disruptions and a look forward to post-pandemic recovery.
A glance back: Business continuity during the COVID-19 pandemic
While some financial services firms were already deep in “recession planning” months before the COVID-19 crisis, no one could have predicted the recession would be fast-tracked by a pandemic, triggering a wave of change, including a transition to remote working.
The financial sector was not ready for this transition. Most business continuity plans were built on assumptions that impact would be regional in scope. None of them were robust enough to sustain the impact of a global crisis. They certainly have never been tested to scale.
Travel restrictions, vendor interactions, even contactless transactions were easy to activate, but remote workforce management? Core functions like trading and market making were difficult to execute remotely due to regulatory compliance. Firms had to have the required technology to support workers providing critical services, while ensuring that protocols for data privacy and cybersecurity were followed.
Then there’s the back office and support staff. Secretaries, administrative assistants, mailrooms, copy centers, records – employees that don’t provide revenue-generating services, but are nonetheless critical to operations. These roles are traditionally performed onsite, and when remote working policies were enforced, firms didn’t have the bandwidth to lay out a well-defined process for support services and monitor productivity with the same speed and accuracy if they were onsite.
A look forward: Post-COVID-19 and beyond
As the world emerges from this pandemic-linked economic crisis, there are lessons firms can learn and apply to rebuild a stronger and risk-resilient business. And the time to plan for recovery and rebuilding is now.
Stress test operational capabilities. Firms must proactively assess risk and impact from an operational perspective to make their business better equipped to withstand another crisis.
This pandemic caused unprecedented disruption, so firms should – to put it loosely – “think out of the box,” identify, and build similar hypothetical scenarios, and analyze potential short- and long-term implications. Hypothetical stress tests could produce insights that performance assumptions don’t cover.
Rebuild business continuity models. The results and implications yielded in stress tests should be built into new business continuity plans to address possible operational gaps, infrastructure deployment, remote-access issues, and other challenges.
Restructure the workforce. Many financial services firms have taken steps to create a less rigid workplace, such as no-work weekends and flexible work programs, but that didn’t prepare them for the transition to a fully remote workforce. Pre-pandemic, most of these workplaces still had performance metrics that relied on physically being onsite, and firms lacked the tools to track and measure productivity once remote working became the norm.
The COVID-19 crisis accelerated remote working adoption and changed workforce dynamics. Firms should develop new policies, enact more flexible controls, shore up technological capabilities, create output-based productivity metrics and the means to track them remotely or onsite, and streamline business processes to boost operational resilience in this new landscape.
The new workforce dynamics
There is no doubt the future points to the digitization and virtualization of work. The pandemic served as a trial by fire for the processes and technologies used in remote working, forcing firm leaders to recognize the benefits of this flexible working arrangement.
Now that remote working is expected to be the norm, rather than the exception, with more fee earners working from home, shouldn’t support services follow suit and be virtualized as well? We’ve seen what’s possible: Businesses utilizing digital mailroom solutions to ensure critical information continues to be delivered; secretaries providing admin services, setting up video conferences and addressing forwarded calls, from their home offices. These support processes can be formalized and scaled to serve enterprise needs, while also supporting the firms’ real estate strategies to reduce costs, free up valuable space for fee earners, and rework shared collaborative spaces.
Firms adapted to this new dynamic, because they needed to. It’s time they drew on the learnings from this crisis to determine what could be improved, what should be optimized, and what can be kept in-house vs what can be outsourced. This is the best way to build immunity and protect business against future shocks.
Find out how Williams Lea can help financial services firms navigate this new, post-pandemic normal with high-touch virtual support services, visit our Services page.
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