COVID-19: Emergency solutions worth keeping for the long term - Banking blog

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Introduction

The COVID-19 outbreak has affected millions of people across the globe with an alarming impact but  with different experiences across countries. The first of many lessons is that for many companies both their business and operating models were unprepared for such a disruption – Switzerland was no exception.

Covid 19 2.1

In the first blog in our series, we introduced our perspective on the immediate steps that banks should take as they transition from the RESPOND to the RECOVER phase. Since then, the number of new cases in Switzerland has reduced drastically and on 29 April the Federal Council announced measures to reopen the schools and more generally the economy. These are positive developments, but as our government mentioned during the conference, this reopening is not towards the “normal” we knew prior to the outbreak, but towards a post-lockdown “normal”, which implies keeping a set of behaviours to keep the virus spread under control (e.g. social distancing).

In this blog, we share six key observations and lessons learned from the countries that were affected early, and offer a perspective on what this post-lockdown “normal” implies for our businesses in the future.

What can Swiss banks learn from countries affected early?

The return to the new norm will not be sudden.  It will be a gradual process over the next 18 months, and we can expect to see further partial or total lockdowns. China has already planned for one in October with the return of the cold weather. The post-crisis environment will likely be different from the one we were used to, and organisations will need to define and implement immediate adjustments to their business and operating models.

To put this into practical terms, we have mapped six key observations along the four pillars of the operating structure – Workplace, Workforce, IT Systems and Processes – to achieve an effective continuation of business and operations.

Covid 19 2.2

1.     It is about smart working, not just remote working

Working from home can be highly beneficial. To obtain the most benefit, institutions need to go beyond simple remote working and embrace flexible remote working conditions, coupled with result-oriented smart working characteristics. This can translate into an increase in productivity and work satisfaction of employees, thanks to a better work-life balance.

2.     People engagement is crucial

Working remotely makes it difficult for employees to feel involved and committed. Banks must develop new ways of sustaining the commitment and motivation of their people, creating a strong sense of belonging and corporate identity even when there is much less face-to-face interaction. Banks can keep their virtual teams informed and committed by adopting an inclusive approach of engagement (e.g. by means of a weekly quiz, daily coffees, a web happy hour).

With remote working becoming more important, employees need to focus on daily objectives, and not just on the amount of hours spent working. Employee contracts and performance monitoring should therefore be adapted accordingly, increasing the alignment with objective-based models. If technological devices and solutions are critical enablers for remote working, banks must empower their employees to work differently in order to succeed.

3.     Ability to serve clients through non-conventional channels

The behaviours and expectations of clients have been moving towards a more digital world for some time. With the COVID-19 outbreak, banks need to move quickly to rethink and adapt the ways to serve them.
They need to review and digitalise key processes – front to back – and offer their products and services across numerous channels (e.g. in traditional private banks, opening an account is not always possible online). In addition, this is an opportunity to re-design the client experience, and consider what matters for the different client segments. New and unconventional strategies will be necessary to redefine interactions with clients.

4.     Experience with digital tools is a success factor

Technology can keep employees virtually connected and productive. To do this, banks should select the right mix of tools to ensure the same levels of productivity as with face-to-face methods of working. Banks should also ensure that the technologies and infrastructure can support remote work and handle digital engagement on a larger scale. The aim should be to make employees feel empowered as banks accelerate the implementation of digital tooling and provide relevant training.

5.     A more holistic approach to cybersecurity is required

Client confidentiality has long been part of the DNA of banks,  particularly Swiss banks. With the changes triggered by the COVID-19 outbreak, cyber threats increased considerably. The  crisis has shown that a more holistic approach is necessary, integrating remote access setups and possibly leveraging AI methods (for continuous update and monitoring). This is an opportunity to revisit the broader setup in order to increase benefits for users and reduce costs, e.g. by re-assessing the use of cloud platforms.

6.     Short-term solutions vs long-term approach

As mentioned in our previous blog, social distancing is going to stay for much longer than a few weeks. Enhancing the digitalisation and the virtualisation of processes is no longer only a matter of efficiency and cost reduction, it is the only solution to ensure continual operations both during and after the crisis.

The current unprecedented situation provides an opportunity to identify which short-term adjustments should remain in place in the future. For example going forward, banks should establish an option for smart working and virtual participation as the new norm, rather than the exception. In the long term, this new way of working may present an opportunity to rethink how to create a more resilient workforce and focus more on health and well-being.

Conclusion

COVID-19 is hitting the world hard. Not surprisingly, the observations drawn from other countries are very similar to those we experience here. As we enter a post-lockdown “normal”, with schools, shops and restaurants opening this week, we will not find ourselves in the world we left several weeks ago. Institutions across the world should consider how to build on the momentum triggered by the outbreak to improve efficiency sustainably, while adapting to new client needs.

 

Sergio Cruz

Sergio Cruz - Partner, Consulting

Sergio is a Partner at Deloitte’s Operational Transformation banking practice with strong expertise in risk and regulatory driven transformation.
Sergio has over 22 years of experience in financial services with a focus on banking operations, where he worked on several large assignments both in Switzerland and abroad, covering the implementation of regulatory requirements, the definition and implementation of target operating models and the development of front-to-back processes. Examples of areas Sergio covers include IBOR transition, FIDLEG / LSFin, FATCA / AEI, Basel requirements as well as cross-border investigations.

Key clients Sergio has worked with include Swiss global and private banks as well as major UK and US banks.

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Thomas N

Thomas Nicod - Director, Consulting 

Thomas is a Director at Deloitte’s Consulting banking practice with strong expertise in regulatory driven transformation and front line efficiency. Thomas has over 15 years of experience in Financial Services, both as external advisor and within the banking industry, where he was responsible for Credit Suisse’s Bank-to-Bank business in Romandie.

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