Financial markets have held up largely unscathed during the COVID-19 pandemic, helping prevent a health and economic crisis transcend into a financial one. That doesn’t mean there hasn’t been a profound impact on financial services as buy-side and sell-side firms scrambled to maintain service levels while working from home. But has the change been different for each?
Markets Media caught up with Nasser Khodri, Sell-side Group President, Capital Markets at FIS, to discuss the findings of a COVID-19 survey at the height of the great work from home shift.
You surveyed 250 buy-side and sell-side firms collectively, what did you find out?
Overall, the study found that nearly a third (31%) believe a remote, geographically distributed workforce of financial services firms will have a substantial impact on their growth models as they work to assimilate a new way of collaboration. Yet, in spite of this, 35% believe it is likely their organization will still allow remote working to continue for the immediate to longer term future.
There were differences between the buy-side and sell-side and their appetite to allow their employees to continue working from home. In particular, the buy-side is less keen on the idea with only 26% planning to let employees do so after Covid-19. In contrast, 42% of sell-side firms are prepared to do this.
Can you point why exactly there is divergence from the two on the work from home issue?
It is difficult to pinpoint a definitive reason. Anecdotal evidence suggests the divergence is around structure and culture. Buy-side firms – especially investment teams – tend to be small and very collaborative. They want to be in the same room together. A great example is Citadel’s rental of the Four Seasons in Florida to keep its team together. Meanwhile, banks have larger teams – which are harder to bring back in their entirety. They are also more likely to have moved some of their teams offshore, so are more used to ‘remote work’ and have the infrastructure
Geographically what I have seen is that the response from Asia is different and institutions there are not responding the same way as they are not set up to work from home. There is a culture of working from the office and individual teams are already distributed across numerous countries. Even before a pandemic a team with members in Tokyo, Singapore, Sydney and Hong Kong were doing most of their communication over video chat and email.
It’s been reported that tech-savvy workers such as millennials and gen-z prefer working from home easier than more senior execs. Is this something your study looked at?
There is evidence to suggest younger employees – Gen-Z and Gen-X – like the office environment and the interactions with colleagues. In comparison, millennials are happier to maintain current work from home arrangements. Seniors leaders are concerned about the impact these changes have on culture, employee dynamics and productivity.
The question around productivity is interesting. We are hearing from clients that their meetings have multiplied by a factor of two and there is an opportunistic mindset of let’s connect, and then let’s connect again in the next 48 hours, instead of three weeks’ time. We are hearing from our clients that productivity is up because they can work through implementation and strategic projects faster.
How do you see this continuing to evolve as we get further into the pandemic and the subsequent recovery?
I do not think we will ever go back to the setup of 100% office-based work from the pre-pandemic. The leadership at FIS believes the same. Ninety-four percent of our 55,000 employees are working remotely and we are operating as business as usual. There is acceptance here that people do not have to be in the same room to do what we do. This set up allows people to manage their schedule around their lives and what they are doing. There are also benefits to our clients. With remote working arrangements there is more flexibility to service them outside of trading hours.
I believe the question is not whether we can work remotely going forward but whether companies can maintain the same culture that happens face to face. This is the biggest draw for returning to the office for many employees.
Where are firms prioritizing their technological investment?
Our study found an increased focus and investment on cybersecurity following the shift to working from home as fraudsters have a new and tempting field to play in. In addition, nearly half (49%) are prioritizing investment in upgrading trading systems to manage the change to trading from home. Meanwhile, 62% say disruption caused by the pandemic is creating increased demand for cloud systems, even in areas of reluctance such as risk management and post-trade processing. There is also a growing acceptance that more functions, particularly in the back-office, will need to be outsourced to cut costs.