ADAPTING TO SUDDEN CHANGES AS BLUEPRINT FOR THE FUTURE OF FINANCE - COVID-19’S IMPACT ON THE FINANCE SECTOR OVERHEARD IN THE CORRIDOR
The Covid-19 pandemic hit us like a freight train. It stopped the world as we know it in its tracks. But even though the crisis will have business and even entire industries struggling to survive, the silver lining is that it creates opportunities too. It already has. We adapted to changes in a matter of days, where before months, if not years of planning would have been in order. During any crisis, all eyes are on the financial sector. They are expected to provide assistance and support the economy, but in order to do so, business needs to continue as usual. Markus Unterberger, Practice Leader Financial Services for Kennedy Executive Search, continued his regular client calls during the global lockdown. While talking to CEO’s and Managing Directors of some of the world’s leading financial companies, he learned a lot about how this paramount sector will, more than ever, path the way for the rest of us.
Crisis Scenario’s
The sector was at the forefront of the 2008 financial crisis and took learning from this experience. Portfolios are analyzed more regularly based on ‘what if’ scenario’s and in general, the sector is much more connected with governance and client focused. Even though the current crisis could not be foreseen and its impact in the long run is anything but clear; the sector can adapt in a more flexible way.
Green mindset
Insurance companies learned that conservative investments are not always the safest bet. How safe are assets and what is the risk in shifting investments? Furthermore, they felt they should take responsibility as a role model. In recent years there was an upward trend of large institutions investing in green activities like solar energy, and windmills but also in alternatives in sustainable infrastructure like trains. The current crisis will boost this green mindset even more and will accelerate the willingness to diversify to investments that benefit the global population. Guidelines and regulations will have to follow suit, further making sustainable thinking the norm.
Change can happen, faster than we think
With the pandemic came measurements that impacted everyday work dramatically. Offices closed and people were forced to work from home full. Had we asked any company in the financial, or any sector really, if this was a real option a mere week before the pandemic, the answer would have been no. Where previously this would have required specific teams to be set up to guide the process gradually, it now was a given from one day to the next. But it worked! And this is just the first, most obvious example. We also learned how online personal banking and transactions are not merely an alternative to cash transactions anymore. They can and should be the way forward. In many countries, payments for everyday costs like insurance, the electricity bill and mobile phone plans were done in cash at a bank’s branch office, not just by older generations. Keeping these small branch offices open and a vast amount of cash flow around costs a lot of money. Money that comes out of the clients’ pockets. Being able to save this will eventually result in a much more client focused operation where regional hubs where experts on a variety of topics provide personal assistance but transactions are done online.
Financial talent of the future
The financial industry has always suffered from a rather conservative and dusty reputation. In the past, this was probably much deserved. But in recent years, the sector has seen dramatic changes in the way it acts and operates. As the above shows, the ability to adapt to rapid change is inevitable now even more than before. This requires a paradigm shift in the attraction of new talent for the sector. Strategic planning and analytical skills are still important, but a pro-active mentality is vital. The next generation of candidates need to be able to focus on execution and drive transformation to a sector that can adapt to change effectively and swiftly. Hiring managers in financial services expect this means that new recruits will be sources in industries outside their own more. Telecom, E-commerce, Pharma and Tobacco are a few of the sector mentioned as they are used to changing regulations and an increasingly critical society. Act fast might be the new motto for a sector that was known for its traditional and conservative values.