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Banking & Capital Markets and COVID-19: Providing stability in the midst of uncertainty
Overview
Banking & Capital Markets organisations can help customers and businesses to pull through the crisis and emerge stronger once the outbreak eventually recedes. How can you ensure you’re ready to play your part?
The COVID-19 pandemic has brought the world into exceptionally difficult and largely uncharted waters. BCM organisations are feeling the strains alongside their clients, their employees and the societies they serve. Even so, it is an important responsibility to sustain essential BCM services, while protecting the health and wellbeing of your staff. Digital capabilities and an effective allocation of resources will be key to meeting shifting demands.
Our global crisis centre is currently working with a range of organisations across industries. Key concerns that are emerging for the Banking & Capital Markets industry include:
Crisis planning
Businesses need to put their continuity plans in place and continually assessed, revised and enhanced to consider new factors. There are seven key actions the Banking & Capital Markets industry can take to help protect their workers, bottom lines and market liquidity.
Effective communication
The immediate priority is communication and assurance. As we highlight in a special report on consumer lending, this includes explaining how services that would normally be delivered face-to-face will now be handled.
As businesses and jobs come under pressure, it’s important to gauge who is most at risk and be proactive in offering support such as payment windows and loans to help tide clients over. Many customers will want to know what happens if their credit scores change or financing options are constrained. Clarity and transparency are crucial in sustaining confidence at both a client and market-wide level.
Workforce
Businesses need to ensure that their employees have the necessary equipment, tools, working practices, access rights and technology so they can work flexibly offsite, especially with the need to minimise contact during business and community disruptions. As two-way communication is essential, there are special considerations to be made for call centre operations. Engaged supervisors maintain continuity and can keep approvals and processes moving as well as clear lines of communication and support. Stress levels may rise due to demanding clients, volatile markets and other challenges with remote working, without the supportive infrastructure and familiar working environment of the “office”.
With increased remote working comes greater risks of cyber security issues. Reinforcement and reminders of cyber security policies and threats such as phishing and data breaches will be key.
Supply chain
In this difficult climate, the overriding question is how to sustain vital liquidity and financial exchange, while enabling temporarily troubled businesses and the livelihoods that depend on them to survive and revive. Ensuring liquidity is sustained where it is needed most requires close monitoring and proactive management. It also requires a careful balance between support for clients and prudent business decisions. These decisions will need to weigh up a number of coalescing factors. These include the stresses within many parts of the economy and BCM organisations’ potential role as a delivery mechanism for government programmes. There will be behavioural strains. For example, to maximise access to cash, some businesses may seek to draw on the limit of their revolving credit facilities. In turn, market fluctuations are leading to heightened volatility and valuation swings within capital markets operations. Other possible threats include the potential for contagion as impairment and default in one area of the economy have a knock-on impact on confidence and liquidity in another. The balance sheet and regulatory capital impact of these factors will need to be fully assessed in striking the right balance between sustaining liquidity and supporting the economy, while safeguarding your business.
Banks will also need to think about how to switch branch staff to digital operations. Think how to deploy options like automated valuation models to ensure that credit supply isn’t needlessly slowed or halted. Potential financial stress and hardship are also important considerations for preparedness and continuity planning. Again, resulting plans could include reallocating branch staff to handle enquiries from concerned clients.
Focus on information
Responding to critical issues will be critical to future customer and employee relationships, and it could very well damage your public image if not handled well. If you respond effectively and sensitively, you can demonstrate your true value to the economy and society as a whole. This is also a chance to bring the exceptional ingenuity and problem-solving capabilities with the industry to the fore.
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Contact us
Bobbie Ramsden-Knowles
Global Crisis & Resilience Co-Leader, PwC United Kingdom
Tel: +44 (0)7483 422701
Kurtis Babczenko
Global Banking and Capital Markets Leader, and US Finance Transformation Leader, PwC United States