Navigating to your new reality in financial services post COVID-19

The COVID-19 crisis and lockdown has brought global disruption on a scale unseen in many of our lifetimes. Despite the shock, the reaction to it has been positive – financial services firms have moved to protect workforces, and leverage resilience arrangements and capital reserves while ensuring customers can access the products, services and the advice they need.

Even with this extraordinary mobilisation effort, the lockdown only represents the beginning of the transition. While the initial response was – by necessity – reactive, we now have an opportunity to take control and proactively manage the ongoing transition to a new reality over the next six to nine months.

The actions leaders take today will define whether they fall back into old habits and ways of working or embrace the opportunity to embed new approaches with positive long-term impacts. Leaders who take the time now to develop a clear view of what they want their new reality organisations to look like will find it easier to navigate their business, workforce and customers through the ongoing uncertainty.

To formulate this view, we believe financial services leaders need to focus on three main actions.

Assess what you want to keep post COVID-19

As a first step, leaders need to assess what elements of change - from a customer, staff and shareholder perspective - are desirable to maintain. Which have long-term value potential? Which would you choose to keep?

COVID-19 has forced us all to make a variety of changes, large and small. Many organisations will have made rapid, reactive and often unprecedented decisions without the usual rigour that time allows. Now is the time to review them and define which can and should be permanent or semi-permanent, and which should only be in place until such time normal operations can resume.
For example, some firms may see moving customer contact teams to a remote setting as a attractive opportunity to review location strategy and reduce costs. For others, the loss of connectedness in the workforce may have created an undesirable drop in morale and performance.

Determine the permanence of each change

Next, leaders need to understand the ‘stickiness’ of each change. They need to consider whether the changes are likely to persist with or without active intervention, and how the length of transition from lockdown will influence this.

Applying this lens of expected permanence to your attractive and unattractive changes will further refine your assessment. You’ll find attractive changes with a high degree of permanence, as well as ones that you’ll need to work to embed. You’ll also highlight undesirable changes that will disappear without much intervention, and ones you need to actively remove as things return to normal.

For example, newly set up virtual call centres would be relatively easy to retain and offer significant opportunity to improve operational efficiency and protect staff in the future – a Win-Win. Whereas increased fraud as a result of remote working and more relaxed security controls is an Obvious Loser.

Influence the changes to define your new reality

When leaders have set a vision by analysing the desirability and permanence of changes, they can start to influence the transition. Even small actions today can have major impacts on the post-COVID-19 world.

For example, if greater uptake of digital channels is a Win-Win, then deciding today to invest in developing and improving awareness of these channels will make it stick post-COVID-19. On the flip side, you will want to reduce any increase in fraud that has resulted from relaxed and less effective controls – you do not want increases in fraud to become a permanent feature.

Change affords opportunity amid uncertainty. As we move beyond responding to the new circumstances created by COVID-19, firms have an opportunity to regain a sense of authority and influence their version of a new reality.