This insight was originally published as a contributor article in Fintech Bulletin. Click here to view.
While the biggest banks have slowly begun repopulating their offices, the long-term future of their real estate holdings is uncertain. Barclays CEO Jes Staley has expressed his intention to “get people back together in physical concentrations”, but also posed honest questions of the bank’s vast office franchises in locations such as Canary Wharf in London.
In many respects, banks and other financial institutions are suitable candidates for a more permanent shift towards remote working. They already maintain more sophisticated disaster recovery systems than is the norm in other industries. This enabled a largely smooth transition of business operations when lockdown measures were first introduced. The industry was also an early mover in adopting near- and offshoring, which has meant that some of the infrastructure and practices required for remote collaboration are already in place.
However, the drive to near- and offshore operations has been limited to those functions traditionally perceived as appropriate for execution outside of primary locations, such as middle- and back-office operations, testing, and routine software development. High-touch projects that require intensive collaboration, such as design workshops or architecture governance, have remained on-site in flagship offices in financial centers. The teething pains experienced around quality and scale have been addressed in many cases. But the speed of execution required for new product development has remained elusive in remote models, and finding staff with experience in finance and the new technologies (e.g. cloud) is a significant challenge. There is also still a broad preference for more sensitive projects, such as regulatory change or front-office analytics, to take place on site.
Accordingly, banks have preferred for both their own staff and external consultancies to work on these kinds of expert-heavy, cognitively intense projects in close collaboration and in person, and few consultancies that specialize in the front office are set up to work in scalable remote models.
With the onset of the pandemic and periods of lockdown, financial institutions focused on business continuity, and many business transformation projects were slowed down or put on hold. But now the pressure for institutions to resume their change agendas is growing. Ground is being lost to companies who have already successfully consolidated in a digital ecosystem to allow collaboration among geographically dispersed teams. Meanwhile, changes to working patterns mean that banks, just like their own institutional clients, will expect an increased quality of electronic and remote service delivery from external consultants. This requires a new set of tools and techniques for the creation of new services and products, both internally and across organizational boundaries.
More than anything, the key to achieving scale, quality, and speed remotely requires the right team mix working closely together.
Lab49 specializes as a business in change initiatives, and has been experimenting with remote delivery models on high-touch programs over the past decade. This has been crucial to our ability to grow and remain competitive as the technology and market landscape has continuously shifted since the last financial crisis. In many cases, lessons from other industries and the startup community have been instructive, particularly in the early stages of product development, where time to market and quality are of equal importance.
We do not forecast a wholesale shift away from on-site consultancy, but a greater adoption of remote working and other, more flexible models of collaboration is inevitable. In the early stages of new initiatives, we have found different practices from service design and startup techniques such as ‘design sprints’ have adapted well to remote delivery. Workshops to map out new concepts for user experience or business design are achievable via video conferencing systems, but they require a very structured approach and use of new techniques.
Tools for remote software development have been evolving for some time, with multiple options available for pairing, code reviews, issue and backlog management, and knowledge sharing. Similar cloud-based design and prototyping tools have also emerged which allow a designer to sketch complex interfaces in real time and incorporate detailed feedback with as much fidelity as in person. The adoption of development in the cloud has also made it easier to onboard developers from different locations onto software projects and get them productive quickly.
More than anything, the key to achieving scale, quality, and speed remotely requires the right team mix working closely together. Building tightly knit teams with the right skills and knowledge takes time and investment. The right model to leverage the scarce skillsets available in different locations to both cross-pollinate and drive efficiency is particularly important, along with building durable teams that can collaborate without friction. One post-pandemic constant will be that financial institutions seek partners who can expedite delivery at exceptional quality. With old ways of working turned on their head, it will be incumbent on banks’ consultants to prove they can deliver value across a variety of scenarios – on-site or remote, hybrid or independent teams, fixed or agile deliverables.