Necessity and the mother of invention
The Covid-19 outbreak is compelling financial services companies to conduct a top-to-bottom review of their operational foundations – staff, office space, methods of client engagement and working culture.
But it may come as a surprise to discover how quickly necessity translates into reinvention when the handbrake of movement restrictions is lifted.
Recent discussions with a London-based asset manager, with an investment banking executive and with a senior recruitment consultant provide The Lens with insight on how this may unwind.
The recruitment market is often a guide to where the economic winds are blowing and there has been a vibrant market for senior appointments in the universal banking, asset management and asset servicing sectors from H2 19 extending into Q1 20.
Since late February, however, the coronavirus has applied a pause button to the industry and arrived with little advanced warning.
This may be an enforced calm before the storm. When governments announce the end of lockdown, this is likely to unleash a step up in demand from banks, broker-dealers and asset managers for high quality sales executives.
With limited opportunity to grow organically as the industry reorients itself, leading firms will be looking to new hires to seize market share and to fight their way out of the shutdown.
More generally, the Covid crisis has triggered an unanticipated performance review for firm’s working practices and estates policies. Companies previously doubting whether large-scale remote working would fit their business culture have found, in most instances, this works better than expected. How far it is optimal is now the burning question.
The Lens understands that a number of financial services groups are reassessing how much value they get from their office space – which may be draining annual rent in excess of £100 per sq ft in Canary Wharf or other prime locations.
The alternative, The Lens is told, is to shrink their key activities into just a few floors in their marquee central offices – and to establish an out of town mini-campus where land is cheaper and the air is fresher. Here they can host clients (when face-to-face meeting is preferred), schedule strategy meetings, do creative thinking around the whiteboard and provide desk space for staff that need (or wish) to work on site.
The remaining time, staff will work remotely. This will reduce commuting time, lower office costs, accelerate the transition to carbon-neutrality and reduce crowding in major financial centres.
With remote-working technology now battle-tested, a transition that might have taken 10 years is being rolled forward into the here and now.