From Status Quo to Engine of Opportunity: 20 Years in Banking Ops

As the financial industry worked to adapt to the regulatory changes prompted by the 2008 crisis, a natural disaster added a new layer of chaos. When Hurricane Sandy battered the East Coast of the U.S. and paralyzed New York City’s financial district in October of 2012, colleagues in EMEA and Asia had to cover and perform processes for operations teams and other staff members in offices affected by the storm. Companies were not fully prepared to transition roles and responsibilities to another region. It was pure chaos, with a significant number of trades unmatched and failing to settle in the market.

Sandy taught the banking industry an important new lesson: it revealed the need for a “follow the sun” approach, where business coverage can be supported by other regions’ personnel if needed. That means training global teams to access post-execution platforms and complete tasks from different locations than where the trades are originally executed. But it wasn’t long before two other unexpected events took the banking world by surprise and forced financial firms to swiftly change their operating models and scale up their technology use.

On 23rd June 2016, the world woke up to the totally unexpected news that the UK wished to leave Europe. What is now commonly referred to as “Brexit” would force many banks operating as UK-based legal entities to set up new European entities if they wished to continue operating in Europe. This was financially burdensome and technologically challenging. The new European entities’ technology had to be interoperable with the UK ones. Many UK live trades had to be novated to the new entities. Management had to be able to monitor positions, breaks, and cash balances in real time in all legal entities. The cherry on top was the recruitment and training of new personnel, which could not be done in person for cost purposes. This is when we started seeing more and more interviews and training programs conducted via video conference.

Changes, though, are often for the best. All the events we experienced from 2008 onwards helped prepare us for the latest unexpected crisis: the arrival of the coronavirus pandemic in early 2020. Covid-19 not only turned our lives upside down, but forced the financial markets to adopt a remote working model, practically overnight. The pandemic could have brought the global finance industry to its knees, but instead we rolled up our sleeves and started operating on virtual teams. Thanks partly to lessons learned from Sandy and Brexit, the operations function was already enabled to access all platforms and perform processes remotely. Our managers were no longer physically sitting across from us, but were a click away on our communication and collaboration platforms. This is where four-eyes checks authorisations were performed, payments authorised and year-end reviews discussed. The majority of firms also supported their employees’ mental health by organizing many types of virtual social evenings.

Over the last two years, we have learned to value our virtual offices. As Covid-19 subsides in many places, we continue to appreciate the work/life balance that our new arrangements afforded.