“Things turn out best for people who make the best out of the way things turn out.”
John Wooden, NCAA Basketball Coach
We are ten days into the “15 Days to Slow the Spread” coronavirus guidelines. The US is becoming the new epicenter of the pandemic. State by state, America is locking down its residents – 158 million have been told to stay home. Businesses have enacted their business continuity plans. Our leaders in Washington struggled to agree on legislation to help those impacted individuals and businesses. The markets are in freefall. A global recession is widely predicted. And one of the hubs of the US financial services industry, New York City, is still 2-3 weeks away from the peak of coronavirus infections.
A lot has happened in ten days. The sentiment is now turning to get the country back to work by Easter. “Back to work” likely will be something in between what we are experiencing currently and what, just a few weeks ago, we called “normal.” We expect there will continue to be areas under voluntary or mandated lockdowns, and our return to normal will be irregular and unpredictable. There won’t be a lot of time for financial services firms to step back and do COVID-19 response postmortems on what worked well and what didn’t. This creates both challenges and opportunities.
Consider the following challenges and opportunities to improve your firm’s long-term position:
- What is your ability to proactively and quickly understand which customers might need a loan to reduce financial stress? Borrowers at risk of becoming delinquent? Best offers to customers with immediate credit needs?
- What are you doing to promote cashless and frictionless payment?
- Chinese banks have started sterilizing currency – what are you doing to reduce risk from customer claims of contracting COVID-19 from “infected” ATM cash?
- Do your metrics and KPIs for tracking remote customer service and remote banking activities give you the management information you need to continually evaluate activities?
- How quickly can you promote digital and automated channels and information regarding branch closures and resource availability to your customer base via an omnichannel campaign (in-app, text, email, social media)?
- Are your systems flexible enough to quickly increase remote deposit, ATM, contactless payments, and card transaction thresholds?
- As liquidity gets squeezed for small and medium businesses, how quickly can you “stare and compare” to determine covenant breaches and properly documented Uniform Commercial Code (UCC) filings?
- What product and technology gaps has your firm uncovered due to COVID-19?
- What strides do you still need to make on your migration of applications and data to the cloud?
- How are your vendors reacting to the pandemic? Does their reaction require you to revisit your vendor risk management strategy?
- What key processes, like client onboarding or client servicing, still require manual intervention, making them more challenging to perform when staff is not in the office? Are you compiling a list of process improvements that need to be addressed?
- Have you been able to leverage modern communications technologies to programmatically make and receive phone calls, send and receive text messages, and perform other communication functions?
- What education are you providing to your consumer and business banking clients to be particularly vigilant for an increase in phishing and scam attacks? Do you have a strategy in place so that your fraud investigators aren’t overwhelmed?
- Does your work-from-home strategy provide adequate infrastructure to work with market data feeds and live news, as well as sophisticated and latency-sensitive applications?
There are other questions to consider. However, we won’t have much time to step back and think about them. A rolling restart of the economy will be irregular and unpredictable, and financial services firms will need to address the questions above while continually improving their capabilities.
If you have any questions or would like to discuss how we can support you during the COVID-19 situation, please let me know.
