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Jun 1, 2020
Matt High

Deloitte: how financial services is responding to COVID-19

A new report published by Deloitte has outlined the contingency plans and core strategic priorities for financial services firms impacted by COVID-19

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<h3>A new report published by Deloitte has outlined the contingency plans and core strategic priorities for financial services firms impacted by COVID-19</h3>

<p dir="ltr">The report, <a href="https://www2.deloitte.com/us/en/insights/economy/covid-19/covid-19-cris… the Crisis: How Financial Services Firms are Responding to and Learning from COVID-19</a>, found that rethinking and digitising client interactions is a high priority for executives.&nbsp;</p>

<p dir="ltr"><a href="//www.deloitte.com">Deloitte</a&gt; reveals that financial services organisations are learning valuable lessons in crisis management and contingency planning as a result of the global coronavirus pandemic.&nbsp;</p>

<p dir="ltr">The report was backed by a flash survey of senior executives in the US financial services industry. A quarter of these held c-suite positions, the remainder were other executive roles.&nbsp;</p>

<h4 dir="ltr">Crisis management</h4>

<p dir="ltr">It was explained that, since COVID-19 crisis, institutions worldwide had relied on existing crisis management and business continuity plans.&nbsp;</p>

<p dir="ltr">However, says Deloitte, “early indications suggest that not all financial services institutions are leveraging their plans in the same way”.</p>

<p dir="ltr">For example, it says that one survey shows close to a quarter of those firms were relying on existing business continuity plans while around 40% “used modified plans and a third created new ones on the fly”.</p>

<p dir="ltr">Close to three quarters of respondents to Deloitte’s latest survey - fielded in mid-April - felt that their firms were “better than moderately prepared to handle the impacts of the crisis”.&nbsp;</p>

<p dir="ltr">Only 16%, Deloitte adds, felt their response worked well. It notes that the most common gaps were found in the plans’ ability to anticipate responses specific to a global pandemic.</p>

<p dir="ltr">Respondents identified ways in which existing resilience plans fell short, including:&nbsp;</p>

<ul dir="ltr">
<li>59% did not include pandemic-specific actions</li>
<li>50% did not address extreme shelter-in-place</li>
<li>34% noted gaps in how to address technology</li>
<li>20% recognised good plans, but said they were not harmonised or linked</li>
</ul>

<p dir="ltr">It is also revealed that several technology challenges were cited, particularly with regard to managing increase training volumes and demand for loans specifically in relation to coronavirus.</p>

<p dir="ltr">Data has also proved challenging. For example, Deloitte says that firms have had to determine the most critical business services in terms of resource allocation.&nbsp;</p>

<p dir="ltr">In this area, respondents demonstrated that they were faced with a lack of planning for the continuity for critical services - manual research and analysis was needed to fill some gaps, and one example found that, while data was available it was stale.</p>

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<h4 dir="ltr">Strategic priorities</h4>

<p dir="ltr">Alongside focusing on contingency planning, the report also revealed several key strategic priorities for senior executives post-COVID-19.</p>

<p dir="ltr">The highest among these is rethinking and digitising client interactions. Technology upgrades are also a high priority, as is reimagining talent operation and digitisation strategy.</p>

<p dir="ltr">Other findings from the report include:</p>

<ul dir="ltr">
<li>Technology investment: respondents cited increasing digital capabilities around client interactions, and technology upgrades in general, as top issues. Deloitte anticipates a doubling-down on the speed of digital transformation over the coming months and years, including increased spending on cloud technology; data center evolution; and digitisation of client experience.</li>
<li>Future of work: respondents mentioned the need to both reimagine the talent operating model - what work gets done, and by whom - and their real estate and sourcing strategy- where work gets done.</li>
<li>Controls redesign: where does the know-how live inside many FSI firms? Many firms have learned that important knowledge is embedded in people’s institutional memories and 30-year old processes that lack playbooks, many of which are still done manually.&nbsp; The most critical controls - process, detective, and preventative controls that rely on improved workflow tools - will be digitised, along with machine learning and visual risk-sensing capabilities.</li>
</ul>

<h4>Read the full report from Deloitte <a href="https://www2.deloitte.com/us/en/insights/economy/covid-19/covid-19-cris…;

<p><em>For more information on all topics for FinTech, please take a look at the latest edition of&nbsp;<a href="https://www.fintechmagazine.com/magazine/fintech-magazine/may-2020">Fin… magazine</a>.</em></p>

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