June 17, 2020 - 333 views|
As the pandemic persists, banks' digital operating models are maturing, turning the quick fix of "work from home" to a more permanent "work from anywhere."
Banks’ shift to work from home (WFH) was fast. But their return to the workplace won’t be. For one thing, employees won’t return to the office en masse anytime soon, with many banks indicating plans to adhere to social distancing and limit on-site employees to 40% to 50% of pre-shutdown levels. For another, employee and customer safety remains a top priority. The biggest change, however, is likely to be to banks’ operating models. As the pandemic persists, digital operating models are morphing from considering WFH as a temporary fix to "work from anywhere" (WFA) – a permanent change in which remote work becomes the norm.
In banking, "work from anywhere" consists of a set of actions that sound modest in scope but collectively add up to a significant rewiring for an industry that has traditionally taken a conservative approach to digital. Within a few weeks, banks have begun tackling everything from standardizing process models and simplifying end-user devices and tools, to adopting common security protocols and pursuing more aggressive cloud migration. Many are signaling that WFA has evolved into a digital operating model that’s here to stay.
Executing it, however, involves hard work.
Supporting a New Operating Model
To accelerate remote access, banks provisioned hundreds or thousands of laptops. They’re juggling wildly different business and technology environments as a result of the economic pause, not to mention years of M&A activity. Worse, the proliferation of bandwidth-hungry desktop applications and issues with local internet service providers (ISPs) are creating uneven employee experiences during remote work.
Against this patchwork background, banks are rapidly rolling out changes they’ve procrastinated on for years, such as eliminating regional differences. Instead of allowing each branch, state or province to run operations in its own way, banks are choosing the process model with the best cycle time and costs, and then requiring each functional area to embrace it. They’re similarly focused when it comes to applications. For each process, they’re selecting a single software solution and permitting little configuration or customization.
Coming to Terms with Cloud-Based Security
Cloud looms large in banking’s "work from anywhere" environment, particularly when it comes to security. Banks’ past preference for building customized integration and security protocols made their environments harder to protect. Yet today’s cloud providers typically offer better security than the world’s best companies. Take Microsoft Teams, for example. The collaboration platform built into commercial Office 365 plans has gotten a big boost as a result of the business pause.
But if you’re not running Office 365 in the cloud, you’re not getting its impressive security benefits. For example, the cloud version of Teams provides much richer functionality for compliance than competing services, such as creating a digital paper trail that includes the recording of audio and video sessions. That’s a huge advantage in a heavily regulated industry like banking.
Does that mean standardization will return banks to the days of vendor lock-in, when organizations had to buy into the full stack to get the benefits? Definitely not. The advent of open APIs and other open standards will prevent the reintroduction of restrictive technology environments of the past.
But consolidation is definitely part of the road ahead. Many banks have made a practice of implementing best-of-breed point solutions and then not exploiting the full platforms. As a result, the average bank has hundreds if not thousands of vendors. They’re now looking to reduce the complexity of their environments by doing more with fewer partners.
One factor that’s likely to influence banks’ move to standardize, simplify and secure is the ascendancy of technology executives in the C-suite. Amid the work from anywhere movement, bank CEOs are enlisting strong chief technology officers to drive the security and compliance agenda. Many CTOs are working in tandem with chief security officers to mitigate exposure and minimize risks.
New Ways to Work
WFA is also introducing change to banks’ workplace management. Clients tell us they’re surprised to find employees working longer hours remotely. They’re also observing a bimodal approach to work: To juggle child care, some employees break their workday into segments, logging on from 7:00 to 11:00 AM, and then again from 3:00 to 7:00 PM. Substantial numbers of employees are working from 4:00 to 9:00 PM.
The result is a data- and fact-based approach to how to make work better in terms of managing the workday and assembling teams. A North American bank we partner with reports that WFA is changing its productivity cycle and management models, enabling it to consider shifting its performance metrics from traditional measures, such as number of mortgages processed, to more nuanced benchmarks, such as business value.
To make WFA a reality, top-down decision making is accelerating faster than we’ve ever seen it. New initiatives regarding hardware, software and infrastructure are coming in rapid-fire succession as executives take advantage of shortened cycle times to keep up their decision-making speed.
As banks standardize, simplify and boost security to support work from anywhere, change is playing out at internet speeds, and each quarter resembles a year. One outcome is clear: For banks, the digital operating model has arrived.
For more on this topic, see the first blog in this series, "Banking's New Reality: Getting Remote Work Right" or visit our COVID-19 resources page for additional insights and updates.