The shock to the global economy from COVID-19 has been faster and more severe than the 2008 global financial crisis and even the Great Depression. These previous episodes saw stock markets collapse by 50% or more, caused credit markets to freeze, massive bankruptcies and unemployment rates soared above 10%. But all of this took around three years to play out. In the current crisis, similarly dire macroeconomic and financial outcomes have materialised in just three weeks.
The current coronavirus outbreak illustrates why regulators have been pushing institutions to demonstrate operational resilience. Pandemics are a ‘known risk’ and should be planned for, so the number of companies experiencing difficulties will have given regulators food for thought. As a result, we may see a sharper focus on testing organisations’ operational resilience in future.
According to the latest Bishopsgate Financial Change Perspective 2020 report, this year finance and technology will continue to merge together to provide new opportunities to organisations and a more extensive range of products to customers. The UK’s fastest-growing consultancy speaks to industry leaders at the forefront of change, including COOs, CIOs, and Heads of Change and senior programme managers from over 30 prominent financial institutions in the UK.
Change is the only constant in finance. While the banking sector has always been subject to the ebb and flow of political and economic currents, it is currently facing challenges requiring change on an unprecedented scale. In each of the topics covered in the report, there are significant hurdles to overcome, and banks today are being challenged more than ever.
The report also points out that 77% of organisations identify employee wellbeing as a key change priority for this year and is high on the agenda of banks and the finance sector.
Employee wellbeing leads the way in factors respondents feel will feature in change plans for 2020. And the report shows a broad range of topics being recognised in this area, with organisations finding ever-increasing ways to support their people. Mental health and stress at work can manifest itself in several ways. By broadening the conversation to talk openly about both work-related stress and personal life events, organisations are seeking to provide a more supportive environment for their people.
66% also expect diversity to be a key focus. Gender diversity has made progress but women remain under-represented in senior and board-level positions. The benefits that diversity brings in terms of decision-making and understanding customers are well understood, so it’s no surprise to see a continued focus there.
Commenting on the 2020 report, Mike Hampson, Founder & CEO of Bishopsgate Financial says: “2020 looked set to be a year in flux, however, the coronavirus crisis has without being dramatic turned the world upside down. The crisis has accelerated a number of trends from the focus of regulators on operational resilience, to climate change and the ability for technology to empower and provide workplace flexibility.”
He adds, “There has also been a change in tone in business conduct, financial institutions are being called upon to show leadership and responsibility and are focusing on the human costs of their decisions. Major banks have paused their restructuring as they know the newly jobless would struggle to find new work now.”
In conclusion, Hampson says, “Leaders are focusing on keeping their teams’ morale up, investing in upskilling and are preparing for a return to normality later in 2020. They know that they have to be in great organisational shape to cope with the post-Corona world.”