With economic downturns and recessions caused by the COVID-19 pandemic hitting the world, it is a unique and uncertain time for the BFSI sector, as more and more services are going digital.
Banking, financial services and insurance organisations are activating business continuity and risk management plans to survive the impacts and challenges of COVID-19.
“Somehow, over the past three years, the practices of risk management got deprioritised, so that the other priorities like customer centricity or digital innovation world take more importance,” said Michael Araneta, the Associate Vice-President for IDC Financial Insights.
Following the COVID-19 pandemic, Mr. Araneta believes it is important for BFSI organisations to revisit risk managements plans and consider cybersecurity, which could lead to being as extensive as capital related issues regarding liquidity and asset liability management.
“This is really just a matter of activating your risk management plans, but also ensuring that you are well equipped to take on the operational aspects of this crisis,” said Mr. Araneta.
Which technologies did the BFSI sector adopt to react to the pandemic?
To react to this pandemic crisis, BFSI companies began to increase investments and priority in digital technologies to ensure their operations were running 24 hours, 7 days a week.
“The critical technologies they obviously would be using are productivity tools, but more importantly, productivity tools that are on the cloud,” said Mr. Araneta.
It was crucial for these cloud-based technologies to be made as reliable, secure, and accessible by staff as quick as possible, even if they were working remotely.
“The ability of the organisations to sustain operations on uninterrupted basis is very important,” said Mr. Araneta.
Along with cloud applications, the next set of technologies to be prioritised concerned cybersecurity and threat intelligence, as the nature of security threats had already started to change alongside the rise of digitalisation, fintechs and insurtechs long before the pandemic.
“Many of these technologies are already available, it’s just really a matter of making sure that you adopt them in a safe and secured manner,” warned Mr. Araneta.
To take a more proactive approach during this crisis, Mr. Araneta also identified the growing importance in the need to observe data analytics, new types of data and make decisions based on the data.
“The ability of the institutions to analyse data on a real-time basis, so that they can proactively react to the trends in the market became very important,” added Mr. Araneta.
As one of the largest technology research organisations, IDC’s financial insights studied the big BFSI industry trends and developments coming out of the COVID-19 pandemic. One of their major findings was that the financial data we used to rely on does not work anymore.
“The data that we used to rely on to make decisions in 2019 are completely different from the data that we need for 2020,” observed Mr. Araneta.
He speculated that this could be due to the changing conditions and macroeconomic situation that has changed the way that businesses are built.
The key is to remain adaptable and adjust to new working environments, customer needs and technologies to make sure that these are a good fit for your organisation.