Financial Institutions | This article is the first part of a four-part series titled How to keep your systems running, reduce risk, and enable growth post-Covid-19. Recent events have caused a change in Financial Markets Technology risks and our mini-series will help you rebalance your budgets to:
- Ensure the integrity of your current services in these unique circumstances
- Simplify and reduce risks as well as medium-term costs
- Develop new products and services to enable growth in line with the new budgeting techniques
The consequences of Covid-19 for financial institutions
The rapid speed of change that was caused by the recent epidemic has had several key consequences:
- The immediate need to home-base all technology staff created an unprecedented load on access to systems through pre-existing connectivity. Going forward, financial institution CIOs will be measured on the speed at which they can home deploy without loss of momentum and this requires a refocus of funds towards connectivity, security, and Cloud-based systems.
- Home-based employees have varying levels of equipment, network access, and quality of conditions for work. Organizations must consider how their disaster recovery plans ensure their employees receive a quality of care based on their individual circumstances and that appropriate tools are provided for them to perform a quality job.
- The rapid and dramatic increase in volumes, as well as volatility, caused processing difficulties for many major organizations with manual workarounds being all but impossible to complete during the processing windows of the markets. This will require that systems are analyzed and adapted to meet maximum capacities at short notice and that they are able to deal with the level of volatility seen during March and April of 2020.
- The introduction of new products at high volume has been difficult for several institutions to handle. I refer in particular to the needed government support programs which require a high speed of delivery in order to maintain a go-forward economy. Criticism of processing times in several countries occurred as this has led to the closure of otherwise viable businesses. However, it is difficult, albeit essential, to build new capability with home-based teams.
- Major regulatory changes have been pushed back such as FRTB and SIMM. Other programs for new builds and functionality can also be delayed. This, in turn, should provide some level of relief for technology organizations, if it were not for the fact that these programs are large in nature, already contracted and in full flight. A completely new way of providing budgets for change work must be used in order for such relief to be realized as and when needed.
- Platform production support must continue to operate within agreed service levels. However, this can prove difficult with home-based deployment, in particular where such requirements are multi-country and take place over differing time-zones. SLAs must be adapted between partner organizations to account for this new dynamic irrespective of location.
- Finally, the world must continue to turn, and economy be generated. Financial markets are not only essential, but they must produce products that are suitable for future conditions as well as within the bounds of regulation. This requires the implementation of not only agile techniques but flexible home-based teams working on projects with a high level of collaboration and in circumstances where requirements can change very quickly.
Traditionally during financial planning, these seven major items have not been deeply considered. However now they must be, and it is not easy: it is not easy because budgets are traditional, we have always done them this way and the starting point is usually last year. Not anymore!This mini-series was taken from a paper written by our CEO, Terry Boyland. To read the entire paper, click this link.