Our Insights

Building Operational Resilience for an Unpredictable Future

An ongoing theme, and challenge

The COVID-19 pandemic fast-tracked digitization as firms adjusted to the work-from-home paradigm and the requirement to conduct business in a remote environment. Holding on to those gains will require new ways of thinking as the business environment evolves, explained panelists at RBC Investor & Treasury Services' recent Operational Resilience webinar.

Firms and their clients embrace remote technologies

For all its challenges, the pandemic has delivered a technological dividend for many firms by accelerating the digitization of information systems and workflows, while motivating clients to eschew manual processes in favour of more efficient digital tools. Asset managers have also discovered that business operations can continue successfully without the level of face-to-face interaction between employees and clients once taken for granted.

Key insights

  • Firms are reviewing business continuity plans to incorporate the experience of social distancing
  • Staff may need re-training to be vigilant against new cybersecurity threats that target emotional vulnerabilities
  • Managers must balance employee priorities with health guidance and business imperatives when re-designing the post-COVID workplace

The ease of adoption of digital communication and collaboration tools has not just been a revelation for managers and their employees, but also their clients. “COVID really helped our digitization effort. It has been my number one digital officer,” panelist Paula Walter, Chief Operating Officer of Ruffer LLP, told the webinar. “Clients are calling us and saying: 'Why can't you use my favourite video-calling platform? Previously, that would have been absolutely unheard of in the private wealth sector.”

Business continuity plans are under the microscope

Operational resilience has been a key theme in 2020 and is expected to remain a high priority in 2021 as firms rethink the modern workplace while juggling business imperatives. A review of business continuity plans will be among the first considerations. While many organizations were able to adapt quickly and smoothly to the unfolding health crisis, business continuity plans were tested by the unforeseen social distancing requirements.

Many of these plans will require updates to reflect the experiences of setting up remote workforces. One panelist noted that while they had a very well written business continuity plan that was well understood and tested rigorously with individual teams, it was not tested as a whole department. This revealed some previously unknown co-dependencies that will be reflected in plans moving forward.

Work-from-home has raised new cybersecurity challenges

The work-from-home era has also produced new challenges in terms of cybersecurity, as staff use company hardware and applications on home internet. Phishing scams have also become more targeted and specific to the health crisis, probing for emotional vulnerabilities in employees.

Preventing security
events from occurring
may be the ultimate goal,
but the ability to recover
quickly when defences
are breached is vital

“Across the industry, we've seen examples of phishing emails that have become more personal and fear-inducing. They announce cures for COVID and the like to entice the reader to click on a link rather than a change in instructions or an invoice like we might have seen in the past,” said panelist Fiona Coughlan, Head of Operations, Comgest Asset Management International Limited.

Apart from re-training employees to be vigilant to emerging threats, firms need to engage with clients and third-party service providers, who may also be impacted by cybersecurity threats. Preventing security events from occurring may be the ultimate goal, but the ability to recover quickly when defences are breached is vital when service delivery to clients is impacted.

If an attack does breach a firewall, firms need to be prepared to quickly detect that attack, determine how quickly systems can be restored, ensure they have the appropriate response to the situation, then learn from that experience and continue to evolve plans, commented one panelist.

Managers must reimagine the modern workplace

Some workers pine for the social interaction that the office affords

Having worked hard to ensure operational resilience as the pandemic spread, firms now face the task of maintaining it as the health situation improves in some settings. While work-from-home has proved feasible and been embraced by many staff, some workers pine for the social interaction that the office affords. Few managers can imagine a world in which all employees willingly return to the office in the short-to-medium term but many regard interaction as vital to spark value-adding creativity. The need to balance the priorities of employees, business imperatives and health guidance may require managers to reimagine the modern workplace as a more fluid, decentralized hub — one in which employees remain engaged without reporting at the office on a regular basis.

Moreover, “The employees of the future don’t want to use the processes of the past so we need to be innovative,” said panelist Jane Hilkjær Lauridsen, Global Head of Platforms & Operations at Danske Bank.

Ensuring the transition goes smoothly may require management to set culture and company values that reflect the new work settings. “I've heard it said, and think it useful to think through, that work is becoming 'a state of mind, more than a place to be,” said Coughlan. “It's going to be really interesting to watch how that plays out. It will challenge management styles and oversight. Training and engagement will also be very important, particularly when face-to-face is not going to be the normal going forward.”

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Sources

  1. RBC Investor & Treasury Services (September 10, 2020) Operational Resilience webinar