While banks typically leap at the chance to innovate their customer channels and cybersecurity threats, they don’t always turn toward their back-office needs with the same excitement. However, they’ll have to make internal changes as shifts due to the pandemic move from short-term to long-term.
Today, companies have to adapt many of their manual processes to support them virtually, either full-time or some of the time. However, not all businesses can easily make this leap. Banks, for example, are a mixed bag when it comes to change.
Many have invested more to automate or digitize customer channels and to address cybersecurity threats. But they haven’t lent as much investment to back-office needs and operations, such as updating or automating core systems and processes, especially when the workforce is suddenly required to be primarily virtual.
Most disaster recovery and business continuity plans account for the need for temporary off-site work. However, global interruptions — like the pandemic — create challenges far more reaching than something temporary. While workforce impacts, customer expectations, competition and government impacts create such hurdles, they also offer new opportunities to banks and the financial services sector.
Moving Forward in Banking
Seeing the likely benefits to a “business anywhere” approach, financial services leaders need to consider their workforce needs and changing processes and technology for the long-term, rather than the finite period of time encompassed in most business-interruption plans.
When creating successful plans to prepare for what’s next in banking and financial services, you should include workforce, processes and technology in those plans.
Obviously, most businesses have had to quickly transition to working remote, which can be difficult in an industry with compliance requirements.
Rather than looking at this as an obstacle, however, this is an opportunity to create an adaptable workforce that can work effectively, whether remote full-time or in a hybrid model. Even if your long-term strategy is to transition back to on-site full-time, this flexibility in your workforce will ensure your team is ready no matter what will come in the future.
But how do you go about doing this permanently, rather than as a temporary model? Here are a few questions to think through as you adapt:
- Which employees can adapt to virtual working arrangements long term? What equipment do they need to be successful? For example, are processes in place for commercial lenders to receive commercial loan documents remotely in a way that is convenient for both lender and customer?
- How does virtual working impact potential hiring? What opportunities does it produce? For example, can you now hire outside your footprint or preferred locations?
- Are you going to transition back to on-site, allow some positions to remain entirely virtual, or adopt a hybrid approach? What changes would you enable in office space usage and allocation?
- What are specific changes needed to ensure you maintain or even improve your company’s culture with the mix of on-site and hybrid work?
Most importantly, ensure your employees view their working conditions and expectations as safe not only for themselves but also for their families and friends.
Manual processes have had to adjust to accommodate a remote workforce quickly, so many organizations might be experiencing inefficiencies. However, this allows your company to streamline process changes with continuity and contingency for greater resiliency in the future.
To start making these updates:
- Revisit your critical support processes and optimize these for virtual working, especially your customer-facing operations.
- Evaluate critical process roles to adjust for changes in skillsets, accessibility and compliance. For instance, even though you may have resources available to perform new or additional process steps, they may not have the needed skills or may violate compliance policies based on the access required.
- Assess which processes you must perform on-site and those you can do virtually or as a hybrid of on-site and remote.
- Develop contingency plans for processes and functions you’re required to shift quickly from on-site to virtual or maintain by hybrid. Please note: Most contingency plans are focused solely or heavily on technology, which could be a significant undertaking to put that rigor around processes.
Most organizations largely sustain their traditional technology solutions with manual processes and on-site resource requirements. However, while core systems have been relatively unaffected by COVID-19, support of these systems, planned changes and enhancements, and major transformations such as mergers and conversions have been affected by delivery slow-downs or change cancellations.
As a result, this also presents the opportunity to embrace automation, digitization and workflow tools to eliminate manual processes — and the need for customer and workforce “touch” — which were already cumbersome before the pandemic.
Plus, customers will demand increased online and mobile capabilities to complete banking transactions versus visiting branches and physical locations now that they’ve gotten a stronger taste during the pandemic.
To start transitioning your technology, consider automation for both customer-facing and back-office functions. This includes robotic process automation (RPA), digitization and workflow automation.
Back-office functions such as mail handling, payments or items processing, loan document management, and reconciliation require automation to effectively accommodate on-site and off-site workers.
As you go through these changes, the most common hurdles will be regulatory and compliance considerations. A virtual workforce introduces challenges with managing data outside the bank’s physical walls. While you already manage most core systems in the Cloud, you must consider security when accessing customer data from remote networks outside of the traditional locations’ firewalls, which could introduce additional costs.
Overall, the challenges the financial services industry has faced and met have resulted in assuring customers that their financial services are secure while demonstrating resiliency for future global interruptions, should they happen. Historically, adversity has spawned innovation and opportunity — and we’ll continue that trend today.