COVID-19 represents one of the greatest ever upsets to the global economies and, as a result, to the business models of financial institutions and the way they do business.
While many changes were already taking place to business practices and operations before the pandemic hit, COVID-19 upset the balance and added extra impetus and urgency to the situation. Institutions are still having to choose between adopting a “wait and see” approach or implementing more proactive strategies to safeguard and, if possible, grow their businesses, sometimes with very little idea of what is around the corner.
Almost overnight the coronavirus pandemic became the single greatest threat to business continuity ever experienced, certainly in the modern age. It forced many finance and accounting organisations to rethink operating models to try and overcome truly unparalleled challenges.
While the future still remains uncertain, business leaders find themselves operating in a more demanding, precarious and unpredictable environment than ever before.
Over the past two years many lawyers, consultants, academics and commentators in the sector have spoken and advised on the immediate and present impact of lockdown and business interruption and a great deal of time and column inches have been spent telling organisations what they will have already known about present circumstances. But it feels like not enough time or thought has been committed to another compelling question; what does the future look like in a post-pandemic world?
As we said, models of financial institutions are and have been changing; how services are delivered, the ways in which revenue can be earned and searches for new ways to monetise value. One of the biggest impacts of COVID-19 has been the accelerated take-up of digital transformation, due to lockdowns creating the need to conduct more and more business through digital channels. It has forced customers to use technologies in which previously they may have lacked the confidence or incentive to use before.
This has resulted in the need to safeguard online business transactions and dealings faster, more thoroughly and at a greater volume than ever before. It has also resulted in the need for more robust, more efficient technologies especially in the fields of card payments, 3D Secure, KYC, KYB and AML just to name but a few. The rise of online transactions has naturally resulted in the rise of criminals trying to take advantage and so, businesses have to be more vigilant than ever to protect themselves and their consumers and make sure this new way of living doesn’t jeopardise people’s money.
Key Priorities Post-Covid
Conversations in the finance sector seem to point to several priorities that are being considered post-covid, let’s take a look at what they are:
Productivity Improvement & Technology Enablement
Financial institutions and services firms are looking for ways to rapidly accelerate their digital transformation and cloud enablement roadmaps.
Reconnecting With Customers
Having recognised that customer expectations and needs have changed at an alarming pace, firms are now looking to implement programs aimed at updating and improving customer engagement.
Creating Vibrant Ecosystems & Partnerships
With business models and market dynamics continuously evolving, businesses are engaging with non-traditional partners to create new value propositions for customers.
Embedding Social Responsibility & Purpose
As markets and economies look towards recovery, there are growing calls for increased focus on environmental, social and governance considerations.
Improving Risk Management & Agility
Maybe the most obvious topic to come out of the pandemic, leading firms are taking steps to improve their ability to deal with sudden shocks and unexpected risks in the future.
The Road Ahead
While the immediate priorities seem clear, the path towards achieving them is maybe not as straightforward. Indeed, it seems that businesses are struggling to implement significant change and certainly at the pace with which it is now required.
But the problem isn’t motivation, as mentioned before some of these priorities were already being worked on, maybe in a different context, long before COVID-19. The real problem facing them is capacity and capability.
The constant presence of lockdowns and the uncertainty of future lockdowns during the height of the pandemic disrupted normal workflows and project lifecycles. Virtual working models have dampened internal innovation and collaboration. Efforts to restructure organisations in the immediate aftermath of COVID-19 has left many financial services strapped for resources.
Simultaneously, a lot of companies are dealing with the talent shortages and capability gaps that plagued them before 2020, meaning the war for talent has become even more ferocious. New work models and the growth of the ‘gig economy’ is helping bridge the gap somewhat. But financial service firms still lack the right personnel and skillset to thrive in the new order of things.
In a post-pandemic world, the issues that have arisen will continue to accelerate investment in technology, especially as borrowing costs continue to stay low. Companies with the capital will also consider acquisition, partnerships or joint ventures to generate new revenue, expand their business and solidify their base. While they kay focus remains on economic recovery and recapitalisation, there is also an unprecedented opportunity for financial services to structurally transform their business, whether through product innovation, new digital platforms or other efforts.
COVID-19 has had a devastating effect globally, bringing suffering and hardship to large parts of the world, with no one prepared for such an eventuality. Now, it has also forced businesses of all types to fundamentally rethink their traditional operating models, business models and customer value propositions. For the financial services industry, the transformation will be challenging; but it will also be necessary.
The financial landscape of the future will be largely shaped by those firms that are able to anticipate tomorrow, while also delivering on the priorities required of them today. They are the ones who will turn the COVID-19 experience to their advantage and build the capabilities needed to thrive in the new reality.
About Sekuritance
The Sekuritance RegTech platform provides a single platform for every eGRC need, including end-to-end AML/CTF, CECL, FCPA, vendor management, beneficiary onboarding, investor check, card processing MFA checks, blockchain wallet checks, cyber-risk assessments, and other RegTech or Business Process Management requirements.
Stay tuned for more info and follow us on:
Twitter: http://twitter.com/sekuritance
Telegram: http://t.me/sekuritance
Website: https://sekuritance.com
