Woodhurst discusses the impact of Covid-19
At 8am on the first Friday of each month, Woodhurst gathers as a group to discuss a pertinent topic affecting financial services, consulting or digital transformation. We call this early morning exchange ‘Woodhurst Discusses’ and it is usually fuelled with strong coffee and a croissant or two. In January we settled down to discuss the impact that Covid-19 has had on the industry, our clients and on consulting. We didn’t want to focus purely on the negative elements, such as lockdown or queues outside branches. Instead, we wanted to find some positive changes which have, or will, occur as a result of the past 12 months.
Great disasters are often a catalyst for positive change. The Great Fire of London in 1666 led to a comprehensive rebuilding effort, better building regulations and eventually a safer, cleaner city. Covid-19 is a global tragedy which could yet become a stimulant for positive change across all of society.
The impact of Covid-19 on the Financial Services industry:
- Increased digital offering: The pandemic forced banks to realise that a functioning digital offering had moved from a nice to have to an essential product. There was a huge raft of change in the first 6-8 weeks as banks rushed to setup new interfaces and move branch-based customer journeys to a digital platform. This resulted in a net positive for customers, however, the pace of change does seem to have slowed after the initial post-Covid flurry of improvements.
- Cost savings: Many of the large universal banks have realised cost savings because of Covid-19. Reduced occupancy across offices, the move to virtual desktops rather than physical laptops and less international travel, among other things, have generated significant cost savings. Banks can now put these cost savings to good use and accelerate strategic change to best prepare themselves for the future.
- Future of the branch: Covid-19 has certainly accelerated the move to digital channels and many customers have even less need for branches than they did at this time last year. Could a new bank branch model be in the offering? Maybe the one location, all banks model championed by OneBanks could be the way forward.
- Overall positive response: In general, banks have come out of the Covid-19 crisis favourably (in stark comparison to the 2007-2008 crisis). The rapid implementation of CBILS and BBLS has been pain free and the implementation of mortgage holidays and other support has been well received.
The impact of Covid-19 on our clients and their ways of working:
- Innovation takes a hit: Whilst individual task productivity has increased during the pandemic, collective workplace innovation has decreased with a lack of ‘brainstorming over a coffee’ or ‘huddling around a whiteboard’. Innovation needs to be fostered and new ways of working are required to encourage it.
- The office of the future requires a change in working style: It’s highly unlikely that we’ll ever return to an office space operating at 100% capacity. The office of the future needs to focus on providing collaborative space to make up for the lost benefits when everybody is based at home. Time in the office needs to prioritise innovation and collaboration but this will require a change of mindset and schedule. For example, diaries need to be cleared of meetings to enable the maximum use of days in the office.
- Planned flexibility is key: The benefits of flexible working can be diminished when only half of the team is in the office at any one time, as it can be detrimental to the other half that are missing out from home. Ways of working need to develop to enable remote workers to be as involved as those within the office. In addition, there’s little value to a team staggering their office days – the real value comes from getting the whole team in the office at the same time.
The impact of Covid-19 on the consulting industry:
- Mop up activity on the digital drive: There is likely to be a long tail of mop up activity following on from the digital drive kicked off by the pandemic. Projects will be launched to demise legacy systems and clients will tend to require a flexible workforce to implement such projects.
- More effort required to maintain impact: A consultant must put in more effort to be as impactful in a virtual world. Some of the benefits to using a consultancy tend to come in the form of challenge to status quo or informal advice on other problems outside of scope, but within the client’s remit. This is much more challenging in a world without side of desk conversations or informal chats over a coffee. Consultants must be mindful of this and go out of their way to ensure they continue to provide maximum impact.
- The virtual environment can be tougher on change roles: When starting out on new engagements and working with different teams, it can prove more difficult to build relationships and trust. This can be overcome but it needs careful planning and action to make sure it’s not overlooked.
The world has only just begun to scratch the surface of what a post pandemic workforce will look like. There are certainly a huge number of opportunities for financial services organisations and their professional service partners. However, everything needs to be carefully considered as the world of work is extremely different to what we were used to 12 months ago, and it is unlikely to revert to how it used to be any time soon.