We look at how the coronavirus crisis has impacted four key business areas in financial services.
Coronavirus has made 2020 a year like no other – and although, at the time of writing, the easing of lockdown restrictions is underway, we will not be returning to the version of normality we knew before anytime soon.
Even if we do eventually reach a point where all restrictions on social and economic life are lifted, this crisis will have had a transformative impact on many industries, including financial services.
So, what lessons have been learnt from this period and what might this new version of normality look like? We asked four experts within RBS International for their views on how coronavirus has impacted customers and employees of financial services companies, the risk function and operation of institutional banking services, and what this means for the future.
“We have to think about what roles will look like if we don’t have the same ties to office space”
Fiona Levy, HR director at RBS International
“One thing that’s really been dialled up is a concern for peoples’ well-being – whether that’s their physical, mental, social or financial well-being. With thousands of people working from home, we’ve had to think about health problems that might arise as a result, such as people working for hours in chairs that maybe weren’t well designed from an ergonomic point of view. We’ve also provided online support services, like a virtual GP for colleagues.
“How you retain and develop talent when you may have to cut costs is a really important issue. Thinking on the future of the workplace has accelerated. Some people will want to go back to the office; other people will be happy if they never go back. We have to think about what roles will look like if we don’t have the same ties to office space.
“So long as we have to social distance, offices will never be used in the same away again. They’ll be used for the times when teams need to come together, rather than as they were used before. But for many people, part of the enjoyment of work is the people they are with every day, so you have to think about how you use technology to keep those connections, even if you are not in the same physical space. We have to make sure distributed working does not leave people feeling isolated.”
“We’ve seen a significant change in customer experience and an irrevocable change in customer expectations”
Richard Bolingbroke, managing director, customer experience, at RBS International
“In March, April and May we saw an increase of more than 50% in digital registrations across all brands within the bank. We’ve seen an increase in digital payment volumes, too. The customer experience has been accelerating towards that need for immediacy, to when and how a customer wants to access a service, on their terms.
“In the business and corporate banking sector, we have relationship managers who meet customers, understand their needs and look at products we have that could support them. Pre-coronavirus, we saw commentators saying the relationship model is dead because robots are becoming decision makers, but we’re still very much in favour of that relationship model. At the start of the crisis, our relationship managers spent a week ringing round, contacting every customer, asking what their immediate concerns were and showing them where we could help. A number of customers have said how important it was to see the bank on the front foot in this way.
“For many people, part of the enjoyment of work is the people they are with every day, so you have to think about how you use technology to keep those connections, even if you are not in the same physical space”
Fiona Levy, HR director, RBS International
“The crisis has really demonstrated the power of the human touch. I’m a massive fan of technology, but we shouldn’t underestimate the influence of the human touch on a good customer experience.
“We’re not going to go back to the way things were, because customers’ expectations have changed. We’re thinking about how we provide the best experience for customers, using technology to enhance that experience. It’s up to us as a bank to get that balance right.”
“The risk function has come to the fore and provided really good input and support for decision making.”
Chris Harper, chief risk officer at RBS International“
First and foremost, this was a health crisis, so the most important priority was to ensure colleagues had all the support they needed. That remains a key focus, looking at ongoing impacts on both physical and mental health.
“Once we moved through that initial phase, the business priority was maintaining the operational resilience of the firm. For most of the financial services sector that meant equipping people to work from home. That was a huge shift – one that I think, pre-Covid, many FS firms wouldn’t have thought was possible. This required robust risk acceptance decisions in relation to activities that most businesses would never have anticipated delivering remotely, such as payments or trading activities.
“Increased working from home can raise the risk of cybercrime and fraud, as criminals seek to exploit potential vulnerabilities as a result of people not being in the office. Coupled with that, there are potentially increased information security risks when documents and customer data are accessed at home.
“The need for robust and timely financial metrics is key: making sure the business remains robust as we work through an unprecedented crisis and an unprecedented fall in GDP.
“Organisations that operate in multiple jurisdictions, each of which has a slightly different passage out of lockdown, need to be aware of how this change is happening across different parts of their business and the risks connected to that.
“One of the positives coming out of the crisis I think, for many firms, was that they recognised the need to make good decisions at pace. The risk function has come to the fore and provided really good input and support for decision making. That will help the profile of the risk function in future.”
“The new normal includes the need to provide seamless digital services and to offer consistency as a trusted partner.”
Stuart Foster, managing director, institutional banking and depository services, at RBS International
“The institutional space, like every other space, has got used to working from home. That’s had a huge impact, because there are a lot of processes that had to be adapted, for us and for our clients. Banking, lending, moving documents, know your customer, reconciliation – there is a whole raft of procedures that in the normal course of business would involve people and paper.
“We’ve moved quickly to digitise some manual processes, in part because we had to, to meet regulatory and customer requirements. As in every other sector, clients now expect more. They expect us to be digitised and seamlessly integrated into all our propositions.
“The demand for transparency has forced us to transform the depository business, so we can get the data needed to provide that transparency. One element of that is environmental, social and corporate governance – a trend for some time but one that has gathered steam recently. We’ll look to deploy capital to fund managers that will do purposeful things with capital, like investing in renewable energy, or to transform brown businesses into green businesses. Market volatility will see more institutional investors deploy greater levels of capital to the alternative investment space.
“We have to think about our business model. The new normal includes the need to provide seamless digital services and to offer consistency as a trusted partner, with a strong balance sheet and the right jurisdictional presence. Banks that can do those things and can really focus on the customer are going to be successful.”