The Implications of Remote Working for the Financial Services Sector
A full year since the onset of the COVID-19 pandemic, the full impact of the financial services sector's transformation is still being discovered.
Sanjay Radia, Sales Engineering Manager at NETSCOUT, explores how financial services have changed with the global health crisis and how its more positive changes can be made permanent.
Even before the pandemic, the financial services sector was under pressure to meet the challenges of the modern, digital world. The rise of open banking, and the move to hybrid cloud infrastructures was a shot in the arm for new digital native competitors, which demonstrated a flexibility and agility that larger, older financial services firms lacked.
When the pandemic eventually struck, staff moved to remote working and customers were forced online as bank branches closed, it caused an acceleration of digital transformation in the largest institutions. Now, customers have grown accustomed to the speed and convenience of online banking. If these changes are signs of a more permanent change, what does this mean for financial services institutions?
Digital transformation in the past
Online banking has been around for nearly twenty-five years with mobile banking following a decade later – financial services are well versed in online provision. However, the level of demand placed on these services over the past year has been unprecedented. Indeed, according to research by Fidelity National Information Services, in April 2020 there was a 200% increase in new registrations to mobile banking and an 85% increase in mobile banking traffic.
In the year since then, continued lockdown restrictions have prevented bank branches from reopening for in-person banking. In this time, employees have adjusted to remote working and customers have adjusted to online banking. This shift to an increased reliance on online banking has resulted in several banks announcing the closure of branches. HSBC, for instance, plans to close 82 branches this year.
Online banking has been around for nearly twenty-five years with mobile banking following a decade later – financial services are well versed in online provision.
The previously gentle digital transformation process has rapidly accelerated since the start of the pandemic, and it looks like these changes are here to stay. Customers who did not previously bank online have had a whole year to get used to the change and are now unlikely to revert back to visiting their local branch, it is just not as convenient as logging into an app on their phone.
The rise in online banking means that customers and employees are increasingly dependent on online systems. This has significant implications, both from a service assurance and a security perspective. Any drop in service could disrupt the customer experience and impact customer loyalty. Added to that is the fact that employees working from home are more vulnerable to cyberattack.
Preparing for the digital future
With customers disproportionately dependent on online systems, service assurance needs to be a top priority for providers. A recent survey revealed that Barclays is the top rated of the traditional banks’ apps with 76% of users rating it ‘great’ for usability. Barclays launched its mobile banking app in 2012, so it has had plenty of time to fine tune it. Even so, to cope with the increased demand, some banks have been forced to increase their VPN capacity, by as much as 600% in the case of Standard Chartered.
As we begin to return to the ‘new normal’ it is important that this progress is continued, and the adjustments made to cope with the pandemic become more permanent. To ensure a high-quality user experience, companies must test and monitor new developments over both wired and wireless networks to account for the expanded user parameters. Companies must also pair this with a revamped vulnerability monitoring process to make sure that any issues are spotted and resolved rapidly.
From an employee perspective, lockdown restrictions forced a shift to working from home but, with closures of bank branches, this shift looks to be here to stay. This impacts security. Bad actors love to take advantage of tumultuous times and the decentralisation of workforces is the perfect opportunity for them. Indeed, in 2020 the annual number of observed distributed denial-of-service (DDoS) attacks crossed the 10 million threshold for the first time in history – the numbers speak for themselves.
The fact of the matter is that home office networks are just not as secure as corporate infrastructures. The rushed nature of the shift to working from home meant that many businesses did not have time to implement best practice security procedures. Of course, it has now been a year and many businesses will have updated these procedures to enhance their security. The next step is to future proof these procedures to account for the hybrid office-home landscape that will likely become the norm in the post-COVID world. Implementing advanced automated DDoS technology will be critical to securing dispersed workforces.
We are only just beginning to understand what the post-COVID world will look like, but with banking apps becoming more popular than social media apps in 2020, it is clear that the trends of the past year will continue. Remote working impacts both employees and customers so it is vital that the financial services sector continues to advance the progress made over the past year and ensure that mission-critical businesses services can operate securely and uninterrupted.