Banking Business Outlook
Business Agility Lessons from COVID-19
In the beginning half of 2020, a study was conducted of nearly 100 community bank and credit union professionals throughout the United States about the challenges they routinely face. As part of the study, the interviewees were asked about how their financial institution dealt with COVID-19. This study captured a unique snapshot in time during July and August 2020 timeframe. This was when many of these financial institutions were making active adjustments to their operations.
Learning how another industry deals with business continuity, offers an opportunity to reflect on how it can apply to your own business. Within the responses, there were some clear take-aways that informs the importance of business agility. These key take-aways allowed for these credit unions and banks to exercise business agility despite having a hybrid model of online and in-person service delivery models.
Data in Decision Making
Data was important for nearly all these financial institutions in their decision making. It makes sense, when making decisions where there’s a high degree of uncertainty, data provides much needed guidance. Most of these financial institution professionals used their business association and governmental data to make decisions on operations.
These decision makers had to balance the safety of their customer, or members in the case of credit unions, and employees versus the need of an essential service. Many of these professionals said that data was key in deciding and making operational adjustments as COVID-19 data changed during the pandemic. A few of the financial institutions used data in deciding staffing levels and which branches to close.
Leadership in Business Agility
Another element that emerged from this study about business agility is the role of leadership. Most of the financial institutions stated that they believe their organizations handled the COVID-19 response well. Of those interviewees, most cited that having decisive leadership was key in how well their organization handled the pandemic. There were two attributes of leadership that the interviewees mentioned several times that appear to be key. The first attribute was the speed of decision makers. Most of the interviewees discussed how important it was to have their leadership to make decisions during the pandemic. Despite using data to make decisions, the leadership did not fall into analysis-paralysis. Rather, most leaders took in enough information to make an informed decision and then made it and perhaps more importantly, stuck to the decision.
The next attribute that emerged as key was communication. Many of the interviewees stated that the leadership did a very good job of communicating to the employees and those they serve. This was despite an evolving picture of the pandemic and various operational adjustments. Communication flowing not only from the leadership, but also to the leadership was important. Many of the interviewed professionals discussed how they sought feedback and input from the employees to inform the leader’s decisions.
Operational Resiliency
Key in any business agility is the ability to adjust to unforeseen changes. The study revealed that all the financial institutions had to make changes to their operations. Nearly all the interviewees said that their customers or members in the case of credit unions made a noticeable move to online services. This underscores the need to be able to service through more than one channel and be able to flex comfortably from one to the other. Many cited that having work from home (anywhere) program allowed them to make operational adjustments quickly, while continuing to deliver essential services. Though, this did not solve all operational issues. Credit unions and banks are unique in the services they offer, necessitating human-to-human interaction. To continue these essential services, all interviewees adjusted how they delivered services. Many closed in-lobby branch services, relying more on the drive-thru and they offered scheduled services. For those that could not close lobbies, use of spacing cues and plexiglass barriers with deep cleaning was common.
