Rapid Recovery: 5 Actions Firms in the Financial Services Industry Can Take Today
The world as we know it has been turned upside down by the COVID-19 pandemic, and financial services firms are feeling the impact more than most. With so much at stake and so many variables to consider, the pressure is on for the financial services industry to make the right decisions to survive and thrive in these uncertain times.
Despite the uncertainty, this is also a time of opportunity to gain a competitive edge. The Harvard Business Review study of the 2008 recession found that companies that combined cost-cutting with selective investing had a 76% chance of pulling ahead of their competition.
So, what are the biggest challenges financial firms face after COVID-19, and how can they overcome them? Let’s dive in and find out.
1. Maximizing Growth and Loyalty Through Personalized and Innovative Solutions
Your customer experience is crucial to your success in the financial services industry. Unfortunately, the pandemic has disrupted how you interact with your customers, so it’s important to re-evaluate your customer experience and consider what changes will persist after the crisis ends.
Let your customers be your guide and constantly watch the innovative solutions produced by other fintech companies. To help spark some ideas, here are some unique ways that fintechs are revolutionizing the customer experience with convenience and personalization.
- Offer a seamless omnichannel experience for customers to provide an integrated experience across multiple platforms.
- Implement automated financial advice through robo-advisors or virtual assistants to power sales and customer engagement.
- Engage with fintech innovators to integrate new products and services to address varied customer needs and increase flexibility in accessing funds.
2. Streamlining Processes and Gaining Valuable Insights for Sustainable Success
Boosting operational efficiency is essential for freeing up the resources needed to innovate in new product development and customer experience. Automation through cutting-edge applications and financial reporting technology typically offers the most significant efficiency gains while providing valuable insights into customer and market behavior that can help you respond more quickly to new offerings.
Unfortunately, many financial processes are trapped in outdated spreadsheets or hindered by time-consuming transactional processes and wasted costs. These tasks drain resources and limit time for high-value initiatives such as managing risk and advising the business.
To reclaim this time and reduce costs, it’s crucial to identify areas where redundancies can be eliminated and resources redirected towards more valuable projects.
- Conduct a thorough audit of all manual processes, particularly those involving repetitive spreadsheet tasks (e.g., budgeting and planning, revenue recognition schedules, etc.)
- Benchmark automated processes against metrics such as time, effort, cost, and errors, to identify areas for improvement.
- Prioritize potential automation projects based on their potential impact on the business (e.g., cost savings, revenue growth, customer satisfaction).
3. Turning Remote Work into a Competitive Advantage
With remote work becoming more prevalent, ensuring productivity doesn’t suffer due to a lack of communication and connectivity is important. So what investments and changes can you make to keep everyone connected and productive during and after the crisis in the financial services industry?
Cloud-based systems enable finance teams to remain synchronized and empower employees to contribute on individual and group levels, resulting in happier and more engaged employees. The right technology tools can lead to significant cost savings and boost employee morale, making remote work a competitive advantage. Here are two ways you can enable your remote workforce with technology
- Enable with cloud systems: Cloud systems offer cost savings, scalability, and the ability to work from anywhere. They allow instant deployment of applications and synchronized information for remote teams.
- Use chat tools: Messaging tools like Teams or Slack facilitate quick and casual conversations and help maintain communication levels while working remotely.
4. Finding Growth through Mergers and Acquisitions
Many businesses hesitate to pursue mergers and acquisitions during a downturn, but this can be a mistake. A buyer’s market with undervalued assets and companies can present a unique opportunity for growth-minded organizations. Here are two ways to leverage M&A during a downturn:
- Enter a new or adjacent market: Entering a new market can provide diversification, expand your product portfolio, and increase your wallet’s client share. However, doing so organically can be risky. Acquiring a player in a new market allows a firm to hit the ground running with established talent, technology, and/or customers.
- Accelerate an existing business: An acquisition in the financial services industry can expand geographic reach and add new features or products to an existing product line. For example, BlackRock acquired Barclays Global Investors during the 2009 downturn, which helped it expand from active to passive-investment management and become the world’s largest fund manager.
- Diversify with M&A: Acquiring a player in a new market can mitigate risk and provide immediate access to established talent, technology, and customers, helping to expand your product portfolio and increase your client share of your wallet.
- Expand with M&A: An acquisition can accelerate an existing business by adding new features or products and expanding geographic reach. BlackRock’s acquisition of Barclays Global Investors during the 2009 downturn is a prime example of how M&A can enable growth and transformation.
According to a PwC analysis, companies leveraging available capital and making deals early in a downturn could see better returns than others in their industry. The key is to focus on best practices and to address deal strategy, leadership, capital, culture, and workforce.
5. Find and Hire Exceptional Talent
During a downturn, many businesses resort to cutting bonuses or reducing staff. However, this can be a missed opportunity to secure top talent that you would likely only be able to attract after the crisis. Here are a few ways to find and hire exceptional talent:
- Consider available candidates with exceptional skills: Look for candidates with strong customer service, flexibility, and good collaboration capabilities, in addition to the technical skills needed for specific roles.
- Hire a new leader to enter a new market or introduce a new offering: Consider hiring a new leader who can bring a fully functioning team and complete book of business without the cost of formally acquiring an entirely new business.
- Look for “Ninjas”: In software, there is the concept of the 10x engineer, or “Ninja,” who has 10x the productivity of the average engineer. Look for “Ninjas” who can be game changers for your firm, whether an investment professional, an FP&A guru, or a salesperson.
In times of crisis, it’s important to focus on cost-cutting measures and invest in new opportunities that can set your business up for long-term success. By being proactive and strategic with investments, you can boost efficiencies, weather volatility better, and take advantage of new trends. Schedule a 1:1 demo now to see how Sage Intacct can help you recover and scale to new heights.