Covid-19 has impacted all industries across the globe, and financial services sector is no exception. The sector is enormously affected due to its correlation with the broader economy and its activities, and link to all other sectors’ activities, oscillating from financing to spending to savings.
With a widespread and diversified clients base across sub-sectors including banking, securities and capital markets, and insurance; the industry is in numerous ways responsible and aligned with overall activities related to individuals, communities, and regions. The crisis has impelled financial services sector to strategies in order to respond proactively on its business resilience and preparedness for the bewildering circumstances.
To navigate through this predicament, numerous actions have been strategized and implemented across the value chain. Impact of some of these actions are instantaneously discernible through market and client fronting functions, whereas rest of the efforts are focused on aligning and managing the support functions, captives and vendors; subsisting through business solvency; strengthening risks and stress monitoring, regulatory adherences; and protecting shareholder’s worth. These actions, crucial to sustainability, are in the industry’s priority list.
How financial institutions are responding to the COVID-19 crisis
Like other industries, financial institutions are facing a broad range of issues related to operations, employees, client servicing, stakeholder’s management, business efficiency, profitability, business resilience, and preparedness and viability for COVID-19 like scenarios. Varieties of actions are being taken by financial institutions globally to navigate through these challenges and to curtail the impact of the crisis while protecting business continuity and solvency. Assortments of these actions are comprehensive and predominantly dependent on the country / community level situations and lockdown policies implemented by authorities, depending on the severity of COVID-19.
After observing the variabilities of challenges and responses across financial institutions, we have bucketed their actions under four headings (Figure 1).