Digitisation: moving years in weeks

The COVID-19 lockdown has been a catalyst for the adoption of digital technologies in financial services (FS). In retail banking, for example, the use of apps has rocketed.

With mandatory working from home (WFH), digital connectivity is essential, among colleagues, and between employees and clients.

WFH was already fairly common practice in parts of financial services before the lockdown. As many employers had already provided employees with WFH equipment, employees were relatively well-prepared, even though the crisis was unexpected. The transition was surprisingly swift and smooth. This has emboldened FS leaders to ask: how far and how fast can we transform our businesses?

Preparedness for prolonged WFH

Our survey of FS employees asked respondents to rate their employer’s preparedness for a prolonged period of WFH when the government’s stay-at-home rules were first introduced in March. 73 per cent indicated that they thought their employer was prepared or even ‘very well prepared’ and only ten per cent of responses indicated that their employer was unprepared or ‘very unprepared’. One respondent commented: “Unprepared before lockdown as most staff could not access systems at home. This was resolved very quickly, however.”

 Figure 1. Preparedness of employer for a prolonged period of WFH

Among the ten per cent (49 respondents) who thought their employer was unprepared going into lockdown, most (78 per cent) indicated that there was a need for more or better technology. But respondents also recognised that effective remote working is not just about technology. A number of individuals said their employer could improve its organisational agility, its motivation of employees and its adaptation to cultural change. Concerns about risk controls and cyber-security were comparatively few in number.

Figure 2. Areas of investment for employers rated as unprepared for a prolonged period of working from home 

Note: Sample size = 49

Equally, for the small minority (10 per cent) of respondents who rated their experience of WFH as negative, the lack of suitable equipment (14 per cent) and the lack of sufficiently fast internet connectivity (12 per cent) trailed well behind other factors, such as fewer in-person interactions and maintaining a work-life balance.

Provision of technology

When asked if they agreed that their employer had provided the technology to enable them to WFH effectively during lockdown, the vast majority of respondents (85 per cent) agreed, and only five per cent disagreed.

Figure 3. Agreement that employer had provided technology for effective WFH

The most widely-used mechanisms provided by employers to help optimise employees’ WFH experience have been online chat tools (used by 66 per cent), collaboration tools, such as file-sharing (56 per cent) and online video tools (45 per cent).

Figure 4. Usage of employer-provided working from home tools

Most respondents were happy with the equipment and tools that their employer had provided. Nearly two thirds (64 per cent) said that they did not need anything else that did not already have. Some made specific suggestions about what the employer might provide, such as a software phone or a laptop.

While employees are happy with the tools provided, employers will need to measure performance and productivity more rigorously if WFH is adopted more widely in the long term. They will also need to supply employees with appropriate technical support, and to train them to make the best use of the tech provided.

Of the minority (24 per cent) who felt themselves to be less productive WFH, 39 per cent felt themselves to be less productive “analysing data, e.g. building spreadsheets”, 35 per cent while drafting documents and 27 per cent while reading documents. These are all tasks best done with the right technology, including large screens with high resolution.

Figure 5. Least productive work tasks to carry out at home (for those who feel less productive WFH)

More than a fifth (22 per cent) of those who felt less productive WFH cited “worse technology” as a reason.

Figure 6. Top reasons for decreased productivity working from home vs. working from the office prior to lockdown 

Why WFH worked in lockdown

The sudden yet largely successful shift to a more digitised and –so far— resilient operating model has been aided by a number of supporting circumstances.

  • Working from home was imperative to keep FS businesses functioning, given the risk of infection from commuting and spending all day in offices (as they were then organised). Lloyd’s of London, for example, closed its famous Underwriting Room in Lime Street even before the government announced its lockdown measures. Brokers and underwriters were, like colleagues across the City, literally voting with their feet: the day before the closure, footfall in the Room had fallen to about 200, from the normal 5,000.
  • Technology underpinning collaboration, such as Zoom, Microsoft Teams and WhatsApp, has advanced rapidly in recent years, and was available to support a much closer substitute to real life than ever before.
  • Regulators have provided a supportive environment for WFH. For example, the Financial Conduct Authority stated that its rules permitted digital signatures by wealth management clients on key documents and it also temporarily flexed its requirements for recording dealers’ conversations.

Sustaining successful WFH

In future, we expect firms to prioritise the use of physical office space for specific purposes, such as in-person meetings.

FS firms are in a good position to restructure the working environment when lockdown ends, and to make much more use of WFH. This is what most employees expect for themselves, having found that, on the whole, WFH is a positive experience.

Employers need to focus on three areas to accelerate digital transformation and build long-term resilience into these new ways of doing business.

  • The positive gains from digitisation must be embedded into working practices. There should be a ruthless focus on securing efficiency gains, e.g. with less use of manual and paper-based processing.
  • Measures must be taken to address risks introduced or revealed by WFH:
  • Controls should be implemented to protect employees and customers/clients from data breaches.
  • Operations must be made more resilient to withstand further waves of COVID-19 infection, or even the emergence of another zoonotic virus. This will call for flexible working models, and the ability to adapt quickly, efficiently and effectively to unforeseen developments.
  • Operational risk controls must be reviewed and updated: e.g. controls over personal devices used to support trading.
  • Changes in business practices should align with the evolving expectations of customers/clients and the market generally in a post-COVID-19 ‘new normal’.         

This blog has examined the implications of the COVID-19 pandemic on digital transformation. In subsequent blogs, we examine three other factors that FS need to consider.

This blog is based on a survey of 501 employees working in financial services in London, which was undertaken by YouGov on 5 to 11 May 2020.