Challenges in working from home in the financial services industry

By Manish Kumar

Covid 19 has forced the world to adopt social distancing. This has in turn forced most companies with two choices: shut down operations or adopt WFH or Work From Home for their employees.

WFH is not a new concept and is very successfully implemented by various companies around the globe for more than a decade now. However, there remain certain challenges in implementing and adopting the Work From Home mode, which has led to its lower-than-expected rate of adoption.

The challenges are bigger in the financial services space, owing to the critical nature of the work involved. Even within a financial services firms, while it is easy to facilitate to work from home across many functions, a few critical operations (like treasury, settlement etc.) still require the teams to be present in office.

So what are these key challenges that the financial services sector faces in adopting Work From Home.

Organisational Readiness:-
Organisation Orientation: Working from home as a standard business practice require a lot more than simply allowing it. For it to be more effective, an organisation must think of being able to extending to the employee’s home almost all the facilities she gets in office. Digital connectivity to servers and applications may just be the first step. The organisation needs to design its functioning in a way that an employee is accessible to all co-workers and vice-versa in a seamless way without either side knowing where the other one is working from.

Organisational Maturity: There is a suite of solutions available in the market that may enable an organisation to achieve the objective, but the choice of these solutions depends on how and exactly what the organisation needs to achieve. It is not possible to achieve seamless accessibility and productivity from home in one day. An organisation must be committed to the same and take consistent steps forward towards achieving its goals as it matures the culture of Working From Home and is still be able to work.

Trust in employees: One of the biggest challenge and a crucial element is the organisation’s willingness to believe that the employee would deliver results. Introducing Work From Home facility without developing an inherent faith in employees and their managers to trust each other would not work. Organisations have a tendency to very quickly abandon a facility as soon as they feel their employees have not been working honestly.

Security: The biggest challenge after internal organisational readiness is security. Financial services is the most paranoid sector, when it comes to security of its operations. There are concerns around client data and other transaction- or trade-specific data that must be handled properly. Homes are more vulnerable places and are not professionally secured as offices are. Leaving aside cyber security risks, working from home means non-employees like family and friends can see something they should not, and this is not an acceptable event. Further, there is a high chance of bad behaviour leading to frauds that may simply not be traceable.

Client Needs: –
Face-to-face interaction: In many cultures around the world, people want to meet to do business. The financial services industry handles money or assets of people and, therefore, it revolves around trust. More often than not, clients would want to meet before transacting. Hosting client meetings at home may not be a feasible or even welcome idea. A lot of financial services businesses depend on direct interface and while a video call come close, many clients may not be comfortable with use of technology to connect. As an example, in the experience of many digital wealth management firms, it has come to light that even though there is digital access for them, the reality is that clients still want to talk.

Client Infrastructure:
 To be able to work with clients, it is essential for clients to accept digital working modes. As a first step, clients must be comfortable in receiving and sending digitally signed documents instead of documents with wet signatures. Clients must be willing to understand digital signatures, invest in having their own digital signatures made and know how to store and use them.

Regulatory Requirements: Many client-side regulatory requirements, especially during client onboarding or when specific client mandates are needed, require a financial services entity to have a face-to-face meeting with the client. The speed of onboarding clients changed dramatically when Aadhar-based eKYC was enabled and it nosedived again after it was disabled. While the regulators have enabled some flexibility in onboarding again, there are other interfacing requirements as well, which will need a re-look before digital interactions become seamless and comfortable.

Technology Challenges:-
Bandwidth resilience: Financial service businesses require stable and fast connectivity for its employees to stay connected with the applications and company networks. Many a times, it is difficult to get high resilience bandwidth solutions at home as one may require.

Technology Infrastructure: It is one thing to exceptionally allow employees to work from home and another thing altogether to be open to Work From Home as business as usual. The former may not need much infrastructure capacity, but the latter may mean a huge amount of system-stress plus additional solutions that may be needed to augment people to have team collaborations etc.

A very basic technology stack for Work From Home will consists of:

  • VPN tunnels
  • Extra Laptops configured for VPN access
  • Dongles for Connectivity and over the air security hardening
  • Work re-alignment
  • Use of Slack Business for work- flow intra office real time communication
  • Zoom cloud meetings for external mtgs.

Cost of Technology: Technology is not cheap. And to commit to the flexibility of Work from Home will require a reasonable amount of expense on account of the various solutions to be procured as well as on personnel to support and supervise the same.

Some Operations Cannot Work From Home: Some operations like branch banking and real-time operations like treasury or settlements etc are not possible to be executed from home.

  • Bank Branch Operations: Bank Branches are designed to be physical interface points for customers. The rush of customers at bank branches and the fact that banks still are expanding the Branch network are reasons enough to say that the need is real and present. These front end services cannot be made to work from home.
  • Payments and Settlements: Not all banks have all their operations digitally connected. Many services in the financial sector is delivered in tired fashion – we have many types of banks and payment systems with tiered access to services. Some of them are not fully technology oriented but have the respective services license and need to be supported for some parts with other institutions. Therefore, running Payments and Clearing and Settlement systems is challenging and needs physical as well as digital interfacing – making Work From Home an impossibility.
  • Real Time Operations: While branch banking etc require customer connect, the Real Time Operations are highly time and value sensitive. They require an concentration and environment of high connectivity (with systems) and people. Connecting systems with high bandwidth internet and People with Phone lines (from home) is not the same is being there in office. Risk of non-timely action may be disastrous.

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