The first quarter of 2020 hit Australia hard. Who could have predicted the devastation of the January 2020 bushfires and then that being overshadowed by an unprecedented pandemic and lockdown of the economy. As the year continued and COVID-19 worsened, the 2020/21 budget was focused on 'recovery' for Australians and, in particular, committing over $507 billion to the financial services industry to support this recovery.
Schemes, bills and reforms were introduced, including the First Home Loan Deposit Scheme extension and the Your Future, Your Super reform, aimed at saving $17.9 billion in the next decade. With Australia's current cash rate sitting at a historic low of 0.1%, the government took action in late 2020. They introduced to parliament The Financial Sector Reform (Hayne Royal Commission Response) Bill 2020. The financial services industry continues to adapt to changes brought about by the Royal Commission with further education requirements and increased compliance administration.
Here are our top 5 areas that the financial services industry should focus their investments towards, in order to get through 2021 and be prepared to face any further government initiatives or sudden economic changes.
PWC sums up the important role the financial services industry will have in rebooting the economy in a post-COVID world: "As the keeper and allocator of capital, the enabler of savings, investment and commerce, and the transferer of risk". Decisions that are made now by various players in the industry will have long-lasting effects on the future of Australia's economy.
Financial service providers will need to have the knowledge and technical tools to be fast, agile and innovative, to keep up with economic and customer needs while potentially still facing ongoing pandemic restrictions and challenges.
Many mortgage brokers, financial planners and paraplanners, especially SMEs, had successfully embraced the working from home model for quite some time prior to COVID. It just so happens that the pandemic has had large corporations reassess their need for office-based staff and consumer-facing shopfronts. Many are now favouring the benefits of a mobile workforce and the added capability to meet with clients when and where they require, thanks to adopting technologies such as video conferencing and digital document sharing and signing.
Product and services changes
Financial services providers will need to reassess their product and service offerings in response to changes brought about by the pandemic. Travel and home insurance policies will need to become radically different in light of environmental emergencies, remote working models and COVID-19 travel plan changes. The pandemic has made customers more risk-averse, focusing more on their own retirement and security above all else.
In 2021 and beyond, the focus for financial service professionals will need to be on helping customers both navigate and adapt their financial position to meet the uncertainty of ever changing market conditions. This is where trust and loyalty comes in; with a focus on building advisory services to secure loyal customers long term. As an example, the pandemic has seen industry leaders adopt a “community-first” mindset to help boost the industry’s tarnished reputation following the royal commission. Product documentation is another element that requires in-depth review, especially clauses relating to hardships and business interruptions.
It's not just the financial services industry that has adopted digital; every industry that wants to survive post-COVID has embraced technological transformation. From artificially intelligent (AI) chatbots to mobile app-based platforms, the focus is on delivering high-quality services when and where customers need them. It's normal for businesses to rely heavily on the cloud; instead, new momentum is shaped around a more responsive and personalised service or product.
It's also opened the door for Fintech companies to provide the technological capabilities that the finance industry needs. However, this includes the likes of Apple and Amazon, who may well be making a play for market share.
Due to the uncertainty and doubt that customers feel since the pandemic, mortgage brokers and financial advisors will need to dedicate much of their time to meeting with clients and talking them through the options available to suit their situation. This, mixed in with the increased levels of regulatory compliance administration tasks, will see financial service businesses needing to find more efficient and cost-effective ways of working.
Many are turning to offshore teams to fulfil this need. From client meeting scheduling and follow-up paperwork to ongoing communication cycles and bookkeeping, businesses are finding overseas staff's assistance to be invaluable. And in a climate where some commissions and revenue generating channels are reducing, savings on labour costs can be vital to business success.
The benefits of adopting new resourcing strategies in this period of change
In tough economic times, it takes innovation and a willingness to change how things are done to survive. Outsourcing is a resourcing strategy available to financial services, that if done well, can assist in improving efficiencies and increasing margins.
In 2017, the Banking, Financial Services and Insurance (BFSI) sector contributed just under 30% in the global BPO market. With numbers still increasing, the sector is anticipated to grow at the highest rate between now and 2025.
Our own research has uncovered the following facts regarding the impact an outsourced team can have on a financial services business:
Save up to 70% on employment costs: outsourcing can reduce labour costs by up to 70%.
Productivity is 20% higher: by putting the right people in the right jobs, they perform better, are more satisfied at work and are 20% more effective.
Why the Philippines?
The Philippines is one of the most popular locations for Western businesses to outsource to. In terms of size, the outsourcing sector is the second biggest contributor to the Philippines GDP. As such, the government has invested billions of dollars into supporting the industry with world-class infrastructure. In addition to this, The Philippines also benefits from:
Being the third largest English speaking country in the world
A strong tertiary education sector
Being in the same timezone as Perth, Western Australia.
Now more than ever, it is worthwhile investigating how you can scale and grow your business with minimal risk. Download our free case study to find out how a professional services business grew their client base sustainably by 375% in just three years by embracing a blended offshore/onshore team structure.