COVID-19 has spread across the world, and no one knows how long it will survive. Social life is drastically diminished across the globe as whole nations go into lockdown, which hurts economic development. The confusion about how long this situation will last adds to the difficulty of coming up with a brief answer.
As the saying goes, there is still a great opportunity in the middle of a disaster. Several high-potential areas for financial services and banking players could expand significantly during this period. Excessive risk-taking, combined with the mortgage crisis, rendered balance sheets toxic in 2008, wiping out trillions of dollars in consumer equity, affecting capital formation capacity directly, and causing a widespread economic downturn in the banking sector.
Many banks around the world experienced significant losses and required government assistance to stay afloat. As a result, many banks were forced to merge or split to emerge as a single entity. The effects of the COVID-19 pandemic, on the other hand, have had a much broader impact.
Consumer demand has dropped drastically due to the lock-up or shelter-in-place steps. Still, the banking sector continues to prosper, with most banks and financial institutions retaining sound liquidity and capital adequacy, at least in short to medium term. Even people who are usually pass through sights like “get 300 dollar loan here” are know willingly accept this kind of offers.
Indeed, one of the hardest-hit countries, Italy, has agreed to reopen its markets and restart free-market consumption as of May 4, 2020. This would have a positive effect on demand and relieve a lot of financial tension. One of the worst-affected markets is considering resuming operations as a sign of optimism and resiliency. In all countries, the blame for economic recovery falls squarely on their respective governments’ hands, working in tandem with industry.
To inject liquidity into the economy, government agencies must collaborate closely with the financial sector, its regulators, and central banks. In countries like Australia, the government is already collaborating with major banks to achieve this goal. Banks and financial institutions will play a critical role in reviving the economy through a mix of business-friendly policies and customer-centric strategies. These are the key steps to overcome this crisis:
- Determine and prioritize the most critical tasks.
Organizations of all types have been forced to analyze and identify which core roles and resources are critical due to the COVID-19 pandemic. Local governments around the country have identified various types of crucial staff in terms of who is allowed, or even necessary, to continue working. At the same time, the rest of society is ordered to shelter-in-place.
Your company’s target should be defining and assessing the critical business processes and functions that must remain operational in the face of uncertainty.
- Think about the places that have the most effects.
Business continuity incidents impact most companies in three areas: property, operations, and staff. These can have significant financial consequences, both direct and indirect, and should be evaluated based on the areas of greatest risk exposure and effect severity.
Leadership will classify risks within each category and decide how to minimize them by considering each of these fields’ effects. It’s important to note that all of these areas aren’t separate from one another; they usually overlap within an organization’s structure.
- Include resilience training in your strategy.
Continuity preparation should be a multidisciplinary, iterative process in which all members of the company participate. Continuity planning and other emergency management services like IT disaster recovery and crisis communications help the company predict, avoid, respond to, and handle threats and adverse events.
Develop recovery strategies and plans that are clear, actionable, and updated regularly. The highest levels of management must show their contribution to the activities of continuity planning.
Companies would need to weigh their company’s strength, their management team, and their crisis management efforts in the long run. It will also be necessary to revisit and revise the market assumptions that underpin the supply chain and other concentrations to which many businesses have been exposed over time.
The COVID-19 crisis, like a black swan, is difficult to predict using traditional wisdom and forecasting methods. However, after the problem has ended and businesses have had a chance to assess their response, many lessons can be learned and applied.
Meanwhile, businesses must make decisions and take steps during the crisis to recover. After the recession has ended, it will be clear which companies have the strength and agility to reshape their market strategies to prosper in the future.
It is fair to say that the entire world will be engulfed in this medium-term chaos at this stage. However, I am confident that, as with all disasters, human resilience, intelligent policies, research-based medical activities, and widespread preventive measures will help us resolve COVID-19 in the long run.
The HCL team has also followed a strict policy of putting our staff, clients, and partners’ well-being first. We’re collaborating and cooperating closely with local and international authorities to make sure we’re following global pandemic best practices. We’re also putting forth every effort to find places where we can use our strengths to lead, contribute, and help the world. I am sure that we will all come out better and wiser as a result of this experience.
Before then, financial service providers across the board will be wise to take preventative and mitigating steps to minimize the damage. I would also advise stakeholders to consider their organization’s ability to adapt to an evolving paradigm. Examine how technology can be used to allow remote engagement, services, and business continuity. This would be the only way to spread the company and ensure its long-term viability.
This is a Contributor Post. Opinions expressed here are opinions of the Contributor. Influencive does not endorse or review brands mentioned; does not and cannot investigate relationships with brands, products, and people mentioned and is up to the Contributor to disclose. Contributors, amongst other accounts and articles may be professional fee-based.