Throughout 2020, coronavirus (COVID-19) occupied the minds of leaders in financial services firms.
You read news filled with lurid headlines around shutdowns, re-openings, unemployment numbers, recession figures and government support.
If you had CFO responsibilities, it might have been an incredibly stressful year.
When the pandemic first hit UK shores last year, you may have battened down the hatches, focusing on stabilising your business by improving cash flow, cautiously feeding winning investments, and cutting off what you viewed as weaker investments.
It was perfectly understandable at a highly volatile time.
But as we enter 2021 and we see a chink of daylight with vaccines, despite national lockdowns making a return, playing defence and suspending new investments may not be the right strategy.
Instead, like any successful sports team, you should adopt a balanced approach between defensive moves such as cost-cutting, and attacking, such as increasing investment.
It’s an easy and obvious thing to cut costs during uncertain times. But adopting a more attacking approach is more ambitious.
It may be something many businesses only consider when the recovery is already full under way – but by that time, it may already be too late to win a competitive advantage.
Using the example of current Premier League football champions Liverpool, using a balanced attacking and defensive approach before the opposition catches up to what you are doing gives you a better chance of pulling ahead.
How do you find out what your customers want?
Go old school and talk to them. Understand their biggest concerns and where they need the most help.
Are they most concerned about security and risk, or are they only looking to grow fast? This insight will help you change your service delivery and trigger new products.
Look at your own business and think about what you could do. Let your customers inspire you in innovating with your products and services.
Some of the innovations might even last you long term, well beyond the end of the pandemic recovery period.
In financial services, here are five proactive moves you can put into practice now before the coronavirus pandemic reaches its conclusion to ensure you have a faster recovery.
1. Get friendly with customers
Fintech is driving innovation across financial services, including customer service, financial advice, payments and transactions, lending, insurance services, and account management.
Whether you are traditional financial services firm or fintech company, it’s worth keeping an eye on the innovation that’s occurring, as it can support you in developing the new products and services required to help your business stay on the front foot during this challenging coronavirus period.
Fintech shows the importance of customer experience, with fast banking startups winning customers from established banking institutions due to offering better customer experiences, products, services and ongoing support.
You could look at:
Meeting customer demands through offering not only mobile, but social media and multiple messaging channels – such as email, live chat, and text messaging.
It would help to facilitate customer communication through any channel they want.
Automated financial advice
Robo-advisors and virtual assistants deliver automated messages triggered by customer behaviour, which can power sales and engagement.
You could offer a range of services, from necessary advisory information to data-driven tailored services.
New products and services
It might be an excellent time to engage with technology teams to integrate new products and services to address various customer needs.
If you offer ‘traditional’ services, look at fintech as an enhancement, rather than an eliminator of your offering.
2. Improve your financial operations and visibility
To free up investment to improve customer experience, you may need to increase your operational efficiency to free up the capital, headcount and management bandwidth required.
We see financial processes packed with low transactional processes and wasted costs.
Methods often rely on heavy manual workarounds, including the cutting and pasting of information on to multiple systems.
Fintech innovation can certainly eliminate these kinds of redundancies.
Automation could lead to the most significant operational efficiency gains and improve business visibility, helping you to see the impact of a shift in customer and market behaviour early – allowing you to react faster with new products.
Here are some tips to implement automation:
- Audit all of your manual processes, especially the ones done in spreadsheets. If you’re doing the same task in a spreadsheet (such as bank reconciliations) more than a few times, it’s a candidate for automation.
- If your process is already automated, benchmark it across critical metrics (such as elapsed time, steps required, costs and errors) exposing additional automation opportunities.
- Enter all potential automation gaps in a spreadsheet and prioritise them by potential business impact (cost, revenue, NPS). Start to methodically work through your automation list, updating and prioritising as needed.
3. Use remote working as a competitive advantage
Having committed and engaged employees can lead directly to better performance and higher profits, so it pays to invest in your people.
The impact of coronavirus has forced remote working on many companies, so it may be a good time to look at investment and changes you could make to bolster morale and productivity from good to great once the pandemic ends.
They include the following:
- Take the time to do a deep dive on team processes and tools impacted by remote work.
- Determine how you can be more efficient in a world where remote work is likely to be more common.
- Establish if you want specific remote working days or whether you have a flexible working policy – you can potentially designate certain days when you want people in the office.
- If remote working becomes more popular, it’s worth thinking about reconfiguring your office layout to reduce office/leasing costs.
- With virtual meetings, identify what can be shortened or eliminated. They need to have a clear plan with exact next steps and deliverables.
- Use chat tools such as Microsoft Teams, WhatsApp or Slack, but have guidelines for communicating and on which channel.
It would be best if you aimed your business to be driven by your employees’ results, not for the most completed tasks or who is most present in the office.
Aim to empower employees to contribute on an individual and group level – this could result in you getting a more loyal and committed workforce, which could ultimately increase your bottom line.
4. Invest in new opportunities
It may be a good time to invest in discounted assets that can quickly appreciate during the recovery from coronavirus.
With banks foreclosing on businesses and selling assets for next to nothing, you can take advantage of this with minimal financial sacrifice, freeing up funds through restructuring debt and maximising working capital.
Actively develop relationships with bankers and lenders to see what new assets could be available. Update your deal funnel for various scenarios and keep communications with crucial stakeholders top of mind.
When acquiring assets, consider the following:
- Entering a new market can be daunting from an investment and risk perspective if starting from scratch. Acquiring an existing player can dramatically speed up the process, giving you the talent, technology and customers to compete immediately. Expanding in new markets provides diversification if a specific market suffers a downturn, expanding the product portfolio.
- You could accelerate your business by expanding geographic reach and distribution channels or adding new features, technology and products to your existing line. You could also take on new talent in this way.
5. Employ good people with the right skills
During coronavirus, the automatic response may have been to eliminate bonuses and reduce staff numbers.
However, the downturn is a unique opportunity to secure top talent that you would not have been able to attract before the pandemic.
Consider available candidates with exceptional skills that include vital customer service, flexibility, and good collaboration capabilities – in addition to the technical skills needed for specific jobs.
In software, there is the concept of the 10x engineer, who has the 10x productivity of the average engineer.
Can you find 10x hires that can be game-changers for your business? Perhaps a curve-busting investment professional, a top-notch marketer, or a rain-making salesperson?
To enter a whole new market, consider hiring a new leader who can bring a fully functioning team and full book of business.
Now more than ever, you might have a real shot at engaging them.
As we make our way to the other side of the coronavirus pandemic, we’ll adopt new behaviours, have new expectations, implement new processes, and test new business models.
The secret to recovering faster and locking in long-term competitive gains is to balance cost-cutting with proactive actions before the pandemic ends.
It will mean making smart cost cuts while investing in new capabilities and increased productivity that better enable you to better weather the volatility and take advantage of recent trends.
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