Once the fighting has stopped, these technological advances remain, often forming the basis for the next wave of peacetime innovation. For instance, if Dr Harry Wesley Coover hadn’t been trying to solve the problem of how to stick small plastic gun sights to WW2 rifles, whole generations of DIY fanatics would never have discovered exactly how “super” the glue-like substance he was using (cyanoacrylate) actually was.
Since the outbreak of Covid-19 (which definitely qualifies as a modern conflict of epic proportions), financial services has seen more pandemic-driven innovation than usually occurs in two or three years of “normal” operations. Firms have scrambled to find solutions for remote working whilst still navigating the labyrinthine regulations they need to comply and with a distinct lack of wet client signatures. Even in the most apocalyptic of disaster recovery planning sessions, the scenario of basing 200-odd happily office-based employees in hastily prepared “home offices” (read: spare rooms, kitchen tables and garden sheds) would likely never have been mentioned as a possibility.
Now the dust has settled on this “new normal”, attention is inevitably being turned to how to adopt, adapt and most importantly monetise the raft of new (Cov)innovations forced on each business. Take signatures as a good example; pre-Covid, a large number of UK providers were insisting on wet-signed documents for transactions related to moving money or paying clients. Now, most have gone paperless, with some even moving a step further and embracing biometric solutions for client verification, skipping paperwork altogether. In developmental terms, this is the equivalent of moving from crawling to a flat out sprint, all without any warm-up. Would any sane CxO even have green-lit this sort of project at the turn of the year, given the existing method was tried, tested and widely accepted as “just the way it is”? Similarly for home working, now companies have equipped their workforce to contribute remotely, will reserving a desk in your office through a new company “social distancing app” or shared calendar become as ubiquitous (and as infuriating) as booking a meeting room was pre-Covid? Does your company even need all those desks and meeting rooms now people have shown they can work without them?
It is ironic that the biggest pandemic in a century is wreaking havoc across the globe but will most likely leave financial services in a better state than before. Even something as wide-reaching as MiFID II didn’t really affect the way the industry goes about business in any meaningful manner (apart from encouraging the chopping down of a lot more trees for statements). In contrast, Covid-19 is likely to lead to a paradigm shift in how companies, clients and employees interact to fit the new socially-distant but technologically connected landscape. Frequent regulatory changes are part and parcel of FS; by sheer inertia, they are usual resigned to just tinkering at the edges of an issue, rather than forcing fundamental changes to the way an organisation works. Is this (necessary) burden of regulatory minutiae what has been holding the wider industry back from making these larger leaps forward into the 21st century? Is an enforced refocusing on “the big picture” allowing the sort of improvements in working practice and client experience that should arguably have been embraced long before now?
People often try and disprove the notion that war is good for the economy, most notably the French economist Monsieur Bastiat and his hooliganesque penchant for breaking windows. In this instance I would argue that the Coronavirus conflict will actually be good for both the glaziers AND the rest of the townspeople in this particular parable. By forcing firms to focus on streamlining interactions and driving efficiency within their own business, the long term benefits should almost certainly outweigh the short term pain, leaving an industry that is leaner and more “fit for purpose” whatever comes next.