Financial services industry: realities and outlook
The wave of change brought about by the lockdown and the coronavirus is obvious to have been felt by absolutely all industries and all corners of the globe. And the financial ecosystem is no exception. However, its participants worldwide differently assess the impact of the covid-crisis on their field of activities and individually see the new normal. I decided to touch on this topic not only because of its relevance, but also because of the Finanser report I’ve recently come across. The study, conducted by Chris Skinner and George Ravich during May-June 2020, involved specialists from various areas of the financial services industry: financial institutions, fintech, and consulting organizations.
Preparedness for crisis
A half-year ago, it would seem that any company management was ready for the coronavirus and the global quarantine. But it only seemed to be so. 77% of survey participants noted that their companies’ crisis management plans enabled the team to be well prepared for the covid-crisis. This includes both the transition of employees to remote work and the implementation of other business processes. Companies were not sufficiently prepared only for government assistance programs aimed at the resisting the corona-crisis consequences. Overall 43% said that their organization was prepared for the government programs that were funneled through their organizations. A notable result was that for a large portion of American companies it was difficult to handle the government programs. In Ukraine, the representatives of the sphere are coping well with the realities of the corona-crisis and state programs: some have come up with new ideas, strategies and their implementation.
Work from home + compliance with KPI
The 82% majority of the survey participants has supported the work from home concept and are confident that this trend will go forward. The idea of remote work seems to be the most productive and positive to the representatives of fintech, which is not surprising. At the same time, 81% of financial institutions are confident that WFH concept will help to significantly reduce their future office space needs. Fintech has demonstrated the highest efficiency across all departments. The work of IT and general technical departments was especially productive. At the same time, in general, the majority still believes that quarantine has a negative impact on the work process and the achievement of the set goals.
Europeans were significantly more positive about the remote working regime. In Ukrainian companies, this concept of work was also perceived positively. Some companies have decided to work remotely permanently, such as EVO, which has left offices only for coworking. As for LeoGaming, I’ve already written in one of my blogs that we value the office atmosphere and the productive communication established in the office, so we are not ready to give it up completely.
Product lines development
The corona-crisis had a positive impact on the advancement of existing products and on the improvement of fintech and FI collaboration. However, the introduction of new products has been suspended. 60% of fintech representatives believe that the crisis has had a positive impact on the development of existing products of fintech companies. This is to be expected, since from the very first day of the quarantine, digital transformation has been actively advancing in all directions.
Corona-crisis impact in the long term
Yes, a crisis is always nerves, uncertainty and often financial losses. However, the changes of the times in the financial services industry are truly unique. And I am glad that 75% of the study participants are positive about the future of their work. The majority believe that there will be many long-term changes to financial services, and 27% are confident that financial services will change dramatically. Many respondents from financial institutions are confident in the growth of customer loyalty level they will see post-crisis. The reasons are obvious: customers were forced to change their own payment habits, and then the role of fintech solutions within a short time became much more clear to the widest audience.
Business experienced a lack of demand and difficulties during the quarantine period. The pressure was stronger for some industries — entertainment, travel, some have grown — e-commerce, video services, delivery services. Therefore, the key factor for the survival and development of companies will be the usefulness and social significance of the offer for customers. Only then it will stay with them even when the crisis is over.