“The COVID-19 pandemic could be the most serious challenge to financial institutions in nearly a century. They’re working to keep their distribution channels open, despite social distancing advice and supervisory and compliance functions that were never designed for remote work. They’re trying to manage revenue and customer expectations, despite near-zero interest rates and growing pressure on consumers. And, they need to keep an eye on strategy and brand issues that will define their future, as market forces and customer behaviors potentially change coming out of this crisis.”
As COVID-19 moved the staff of banks, credit unions, and other financial service institutions to distributed home offices, leaders of financial services institutions (FSI) have faced sudden and weighty decisions. Cybersecurity, employee engagement and succession planning, among other areas, have taken on renewed importance. So how have boards been maintaining business as usual in circumstances that are anything but?
When Diligent recently talked to FSI directors, 93% said COVID-19 affected their plans for business continuity, and 67% said they were managing risk differently. What they also told us: The right tools and tactics make a difference.
Here are some trends we’re seeing and best practices we’re hearing about from the field.
Keeping virtual meetings efficient and effective
“We’re adding conference call links securely in the board book, which has proven to be really handy.”
-Law clerk, Fortune 1000 bank
Running an effective virtual meeting involves more than sending a WebEx or Zoom link and hoping for the best. As a “seat at the table” becomes a makeshift video conference setup in a home office, FSI boards must consider several elements, including technology, preparation, flow and security.
The board members we talked to have implemented a variety of solutions to adapt: hyper-targeting agendas to combat a growing number of video meetings and resulting “Zoom fatigue,” optimizing schedules across disparate time zones, and setting ground rules on everything from muting to multitasking. They’ve also enlisted a wide range of digital support tools at every step of the meeting lifecycle, such as:
- Diligent Secure Meeting Workflow for collaborating on documents before the meeting
- Diligent Secure File Sharing for distributing sensitive materials
- Diligent Boards for voting and scheduling
- Diligent Minutes for recording notes and action items
- Diligent Messenger for sending reminders and facilitating both group and one-on-one communications
“Diligent has been a life saver!! Being able to manage the content remotely and knowing all users have their meeting papers via Diligent has made things less stressful.”
-Executive assistant, investment banking company
Mitigating risk and maintaining security
As the content of board communications becomes more sensitive, encompassing crisis response strategies, employee health data, layoff or furlough plans and P&Ls in flux, the risk of this data ending up in the wrong hands or otherwise compromised is higher than ever. There’s been a surge in coronavirus-themed phishing, ransomware and distributed denial of service (DDoS) attacks.
Over half (53%) of the directors we talked to said secure communication and collaboration was their biggest concern during remote meetings. Why aren’t more expressing concern?
Maybe because boards have been effectively following protocols to manage risk and improve protections. They’re seriously considering the legal and security implications of all their actions. They know not to send that conference link—or any sensitive board communication, for that matter—via email, or record a meeting without double-checking rules and statutes.
They’ve also been increasing their use of digital tools to safeguard data and facilitate secure communications. We’ve seen daily usage of our crisis management solutions double, as well as a 49% increase in the number of messages sent via Diligent Messenger.
“Given that we are now in a true global crisis, we decided to double our licenses so that more employees at the bank could have access to secure communication via Messenger.”
-SVP and corporate secretary, financial institution
Minding regulatory changes and compliance gaps
The COVID-19 crisis and its repercussions in health, the workforce, technology and beyond is causing seismic shifts in the regulatory climate. A recent Gartner survey reveals legal leaders are concerned with:
- Antitrust matters due to changing supply and demand
- Data privacy in a new world of virtual work
- Employee health information—how and what’s collected and how it’s used
- Ensuring their company meets regulatory obligations in this shifting environment
How have companies been keeping current and compliant? Many have swiftly rallied to update internal policies. As newly remote workforces spur new compliance obligations related to GDPR and other data privacy laws, over one third (35%) of legal, compliance and data privacy leaders surveyed by Gartner have focused on updating their information security policies.
The FSI board members we’ve talked to have also been leveraging technology to meet the compliance challenge. This includes intelligence tools to keep current with new laws and predictive modeling to prepare for possible scenarios on the horizon. They’re centralizing their entity data for greater visibility of operations and gaps. For both internal and external compliance issues, they’re using secure communications solutions, like Diligent Boards and Messenger, to keep leaders connected for improved decision-making.
“[We are] relying on Diligent as much as ever. Senior management has set up a COVID Crisis meeting group and meets once a week to discuss responses to the crises that funnel up to the board as an update.”
-Director of board administration, retail banking company
Learn more about the tactics, tools, and technologies FSI boards are using to adapt their board practices in today’s environment.