Business growth consultant Daniel Groves shares his predictions for the post-pandemic property market with Finance Monthly.

Everyone with an interest in property is asking the same questions as you. So, in today’s article, we are going to share our top seven post-pandemic predictions for the property market so that you can know what to expect. 

House Prices Hit A Record High

Early last year, the coronavirus pandemic set the property market spinning when the country was forced to lockdown for months on end, seeing more people than ever before put their moving plans on hold. Since the latest easing of lockdown restrictions paired with the economy slowly picking up, buyers can expect to face the highest ever property prices. Furthermore, Gary Whitehead from Town & Country Mortgage Services says, “The market has been stimulated by so many positive things all coming together at once, such as the government stamp duty incentive, the return of 95% LTV mortgages again, all [of this] brings further confidence back to what was already a very buoyant marketplace,” says Whitehead. “So many buyers simply needing more space, a garden, an office to work from home, etc, has meant the scramble for property has left a shortage of housing stock, meaning demand is outstripping supply which will always drive up prices. We feel this trend is set to continue in the short term at least until the world gets back to a ‘new-norm'".  So, if you’re looking to buy and have the means, you’ll need to be quick off the mark and ready to move more swiftly than ever before to secure a new property. 

More Overseas Property Investors 

For the property market to recover in a post-lockdown world, we expect to see a rise in overseas buyers coming to aid in our time of financial instability. Property experts suspect there will be further investments from Asia and the Middle East into the UK’s property market, and, in a post-lockdown landscape, their investments will be welcomed with open arms. Investments into new home developments and the construction sector are also expected to boom post-lockdown, providing that extra income our economy desperately needs to get back on track. 

Country Locations Increase In Popularity 

As remote working has dominated the UK throughout the coronavirus pandemic, with many businesses shutting their office spaces for good, many people are moving away from the cities and into the countryside. Interest in rural locations has increased significantly as people seek more space for a driveway and a garden or perhaps even an outhouse to convert into a remote office space. 

More Space For Remote Workers 

Speaking of remote workers, after almost a year closed indoors, working from the kitchen table or at the end of the bed, people are longing for more space to enjoy.  Working from home can be a lot, especially without a dedicated office space. And with remote working set to continue for the long-term, the desire for more space will encourage homeowners to seek out larger properties with more bedrooms and a garden. As such, properties with spare bedrooms that can be transformed into remote offices are predicted to be in high demand. 

Property Viewings Set To Change 

While this has already changed during the lockdown, property viewings are set to be even more impacted as agents have to adapt the way they market homes in a post-lockdown world. Social distancing will be mandatory, as will facemasks, but many estate agents will also need to increase their technical abilities to provide virtual viewings for the long term. In a post-lockdown world, we estimate that virtual viewings will be here to stay. While there is no comparison to seeing a property in person, virtual viewings allow buyers to get a sense of a property virtually before visiting in person, saving time for both the seller and the agent. 

A Delay In Rent Payments 

Lockdown has had a severe impact on businesses around the UK, causing even some of the biggest brands to close their doors to customers for good. The multiple lockdowns and numerous restrictions have caused a rise in rent arrears for retail properties. This has meant many landlords have had to miss or defer one to two-quarters of rent payments. This is expected to be a long-term trend that will possibly cause a knock-on effect on the capital value of many retail properties.  As we enter a post-lockdown world, we hope that shops will start to reopen their doors but imagine uptake will be slow as people brave human contact again and shopping in-person slowly increases. 

Commercial Spaces Transformed Into Residential 

The number of remote workers in the UK has never been higher. Due to lockdown, office workers have retreated to their homes to work, leaving many commercial spaces empty. This is having a significant effect on property values and could influence the commercial sector significantly. The office market has always adapted to the changing environment. However, as London has seen many of its offices close permanently as remote working is accepted for the long term, many commercial spaces are being transformed back into residential properties to help close the financial gap. 

Final Thoughts

The coronavirus pandemic has seen the world live through unprecedented times, causing upheavals to every element of our personal, working, and social lives – and the housing market has not gone unscathed. However, it will be interesting to see how property markets adapt to these post-pandemic times. If our estimations are correct, we could be seeing a lot more changes over the coming months, so watch this space.

High streets around the world have been in decline for many years, with the likes of Amazon as well as other online retailers squeezing many high street vendors and retailers out of the market. Recently however, with people making the switch to home working, things may be changing.

All retailers have been susceptible to the huge rise of online shopping and the COVID-19 pandemic has only accelerated this.

Illya Shpetrik, a USA-based fashion and entrepreneur, has commented on this, saying: “Online retail, be it in fashion or otherwise is of course here to stay. However, people remain keen on their local high streets, which serve an essential purpose. The local high street has changed and adapted itself over many years and will hopefully be here to stay.”

Illya Shpetrik continued: “Online retail and physical stores and shops on the high street will ultimately learn to co-exist side by side. They will both always be there in one form or another. They also relate to certain value we all have. For example, growing up, in the Shpetrik household, we always went to our local grocery store for certain items but to the larger retailers for other goods. This is how high streets and online retail will likely learn to co-exist.”

With more people than ever working from home and with people’s savings and disposable income in the UK and around the world growing, there are billions of pounds and dollars waiting to be spent. Significantly, with people changing so many of their daily and work habits as a result of the changes to how and where we work, it is city centres which are feeling the greatest pinch.

City workers are not in town and city centres in anything close to the numbers they were throughout 2019. However, although many habits and practices have changed as a result of how we are all now working, hose who would go out daily in busy city centres to buy food and other items may still do so in their local high streets. Therefore, at least a portion of what they would otherwise have spent is being spent in local high street shops as well as online.

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Many people have also seized the opportunity of having to work from home and changed their place of abode and work entirely. Co-living spaces, for example, are increasing in popularity, with many empty city centre premises being transformed into innovative co-living and co-working spaces. A key benefit of these spaces is that with micro-communities under one roof, work, business and leisure are combined conveniently in city and urban centres.

This is a significant shift in people’s work-life balance, with people turning to city and town centres to live as well as work in a way never seen before.

On this, Illya Shpetrik commented: “Everything has, in a sense been turned upside down. Previously, it was work in the city centre and live and relax in suburbs and in and around local high streets. This has however become skewed in recent times with co-living spaces for living and work springing up in city centres and shopping now taking place like never before, once again, on high streets.”

In 2020, millions of workers began working from home because of the pandemic. Remote working became the new normal and the preferred work set-up for some employees. With more time at home, workers can achieve a better work-life balance and minimise the number of distractions.

Remote working is a little bit like marmite

instantprint surveyed 2000 Brits who were working from home due to COVID-19. At least 86% of the nation worked at least part of their job from home in 2020. Video calls were used for staff meetings, and Microsoft Teams became the hub for office work. However, the UK’s remote working population appear to have mixed feelings about the new working process.

34% of Brits love working from home and only want to return to the office part-time when the restrictions are lifted. 23% of remote workers enjoyed their newfound flexibility and found they could achieve more in a day without a lengthy commute on either side.

In fact, many workers are happier working from home because they have more time to focus on their mental health. They can take care of household chores on their lunch break, spend more time with their friends and family and keep their lives more organised. A whopping 43% of remote workers would consider relocating after remote working for nearly a year.

Remote working helps staff save money on commuting and gives them more time in their safe place. Employees are more likely to be productive and happy when they can control their working environment.

The challenges of remote working

That said, only 16% of Brits have a home office due to issues with space, budgeting and hectic family life. A home office can help remote workers separate work from their personal lives, even though they are both under one roof. Invest in company branded banners and posters to make your home office a motivating place to work in.

However, remote working does bring a whole new set of challenges. Some workers find it unsociable and isolating to be working alone all day. Children and pets were the biggest distraction for home workers as they often interrupted video meetings. 11% of remote workers said they were experiencing too many distractions at home and found it difficult to concentrate. A home office can help to minimise this distraction so you can stay focussed through the working day.

If you are working from home, consider setting up virtual coffee breaks and Friday night drinks to maintain your team relationships. It’s important to celebrate the good times and identify the accomplishments of your team members. Virtual hangouts can give staff a deeper sense of connection and commitment to the company. Make sure to communicate with your co-workers through calls and voice notes to add a personal touch.

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.

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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.

HSBC said on Tuesday that it planned to close 82 of its high street bank branches in the UK between April and September this year as its customers shift towards telephone and internet banking.

“The COVID-19 pandemic has emphasised the need for the changes that we are making,” said Jackie Uhi, HSBC UK’s head of network, emphasising that the shift was already underway before the pandemic accelerated it.

“It hasn’t pushed us in a different direction but reinforces the things that we were focusing on before and has crystallised our thinking. This is a strategic direction that we need to take to have a branch network fit for the future."

The number of customers using branch banks had fallen by a third in the past five years, HSBC said, with over 90% of customer contact being conducted over the telephone or internet.

As part of a new strategy, the bank will be altering some branches to focus on cash access and establishing “pop-up” branches in some areas. These changes will come into effect by the end of the year and will mean a reduction in services offered by some remaining branches.

HSBC will have 511 physical branches in the UK following the planned closures. The bank’s shares rose 2.1% following its announcement on Tuesday.

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Other banks have also made plans to reassess their working spaces amid the COVID-19 pandemic. The Financial Times reported that Virgin Money and Metro Bank intend to convert parts of branches into flexible working space, and that Lloyds Banking Group would start to test similar measures from October.

These plans have caused concern among some campaigners, who say that local bank branches provide a lifeline for those requiring access to cash and face-to-face services, as well as enabling small businesses to bank without greatly disrupting their own trade.

Business growth consultant Daniel Groves offers Finance Monthly an analysis of the current role of offices and his predictions on how it will shift in 2021 and beyond.

COVID-19 has had a big impact on offices around the world, with lockdown guidelines and social distancing measures leading many to work from home. There have been many proponents of home working, from a better work-life balance to cutting down on the expenses of commuting. But what does this mean for offices going forward? 

While there is still going to be a need for offices beyond the pandemic, the role they play in modern businesses will need to evolve to adapt to the ‘new normal’. These are some of the ways that offices are likely to change in the future to meet the demands of running a business while also maintaining the wellbeing of staff. 

The office is still important

In spite of the rise in remote working, offices are still important to how businesses operate. Many people like the idea of dividing their work life between in-person and remote, in order to gain a better split between their personal life and their career. 

What’s more, some businesses have no choice but to have a central location for staff to work from in order to comply with data security. But in order to stay relevant, businesses require their office spaces to adapt and change with the times. The offices of the future will be shaped from the lessons learned through the pandemic and this means that they need to become a space where the benefits reaped from working there are worth the extra effort required to get there.

From how they look to how they make employees feel and how staff are treated within them, offices need to be worth the journey and over the coming months as we navigate the pandemic and its aftermath, offices will be under closer inspection.

In spite of the rise in remote working, offices are still important to how businesses operate.

A new focus

The focus of the office has now changed – it’s no longer the hub of the company but rather a space for collaboration and creativity. In response to the pandemic, offices are now better suited to providing a place to come together with colleagues and brainstorm ideas. Co-working spaces need to be inspiring and encourage ideation and participation. 

So, modern businesses need to accommodate this and provide break out areas and flexible open plan spaces. Business owners need to recognise that staff need collaborative areas that can be adapted to suit different needs, both for social interactions as well as quieter spaces to concentrate. 

More working remotely

COVID-19 has resulted in more people working remotely than ever before, which has placed a greater importance on having access to good digital services. Employees need to be able to utilise software to collaborate effectively, from making better use of calendars and time management tools to arrange meetings, to using cloud software to share and access files and documents. 

It’s also vital that all staff have great connectivity in order to make the best use of these tools. Businesses need to support teamwork through the right organisational aids so that staff can coordinate and share resources efficiently.

Design focused around people

More than ever before, companies need to pay attention to how their offices are designed in order to keep staff and visitors safe. While mistakes in the office layout prior to the pandemic may have been inconvenient, it could now be unsafe or even illegal. 

“The pandemic has accelerated the move towards genuinely people-focused design,” says Roderick Altman, CEO at SAS International. “This means designing workspaces that accommodate the needs of each and every person rather than considering office workers as a herd. Some of the major issues are reduced density of people, fixed desk working, increased focus on cleanliness and closed ceilings”. 

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It’s not just desks and cubicles that need to be considered, but also other areas of the building such as meeting rooms, canteens, lifts and corridors. 

Hot desking is no more (for the moment)

Hot desking was popular before COVID-19 hit, but it’s no longer a safe option. For companies with smaller offices, a better and safer option may be to consider that only certain people come into the office while others work remotely. But there’s no one-size-fits-all solution and the answer will vary depending on which talent is required for the business and how much collaboration is necessary. 

Even within each business, the needs could vary across different teams and geographies, and varying demands throughout the year. Offices can still be used as a central meeting hub for everyone, but if there isn’t the space for every member of staff to work safely, then businesses need to offer an alternative. 

Final thoughts

The uniqueness of our current situation means that there’s no template for how to move forward or work post-lockdown. The key to success is flexibility and encouraging collaboration between staff, while having continuity measures in place should a second wave hit. From changing office layouts to create a safer work environment to providing staff with the digital tools they need to maintain contact and collaboration with colleagues, businesses need to be willing to adapt and utilise office premises in different ways to adhere to the guidelines as they evolve.

A Clutch study shows that 44% of workers in the United States are working remotely at least five days a week due to the pandemic. This is an increase of 17% before the outbreak of COVID-19. While remote working offers excellent benefits like eliminating unnecessary physical contact, it also presents several challenges like lack of work-life balance and routine, increased distractions, slow internet in certain areas, and remaining productive.

Fortunately, SaaS companies are working to offer solutions to alleviate the stresses encountered by remote workers, including finance teams.

Cloud-based lending

Cloud-based loan servicing software allows organizations to create, collect, and service loans online. In contrast with antiquated paper-based systems that have been completely stymied by COVID-related shutdowns, SaaS loan servicing doesn’t require any face-to-face interactions and it isn’t hampered by snail mail. That means finance teams in real estate, sales, and banking can close loans in significantly less time, even if the local office is temporarily closed.

Of course, the job’s not done when a loan is signed and accepted. SaaS companies are also helping finance teams to manage these e-loans efficiently by building time-saving automations into the software. Think of it like cruise control for banking, so you can focus more time on other parts of your business that require human interaction.

Team communication

Slack serves as a virtual office for remote teams, enabling group or one-on-one communication between colleagues and facilitating immediate access to news and feedback.

Slack is best known for its communication service. However, it also allows you to produce alerts about feedback or new product reviews and automate progress and business activity reports with added plug-in apps.

A Clutch study shows that 44% of workers in the United States are working remotely at least five days a week due to the pandemic.

The features promote engagement and focus among employees in everything they do and allows them to also focus on the company’s collective goal. Slack allows users to create chat groups called channels. Individuals can use GIFs or emojis to convey their emotions to their colleagues, which is vital, especially in these difficult times.

Cloud-Based Storage

You can get work done from the comfort of your home by utilising cloud-based storage solutions like Google Drive, Microsoft OneDrive, DropBox, and more.

Some of the best features offered by Google Drive for remote work on its free version include 15GB cloud storage, 10GB email for large files, and working on spreadsheets and documents offline. It also offers optical character recognition, professional templates, control access to files, and customisable sharing settings.

Google Drive is compatible with nearly everything, including Microsoft Office, so you do not have to convert files. While you can use the free version comfortably, upgrading to your desired package offers more cloud storage, which is vital for professionals who work with large files.

Project Management

Managing a project can be a daunting task that may become much harder if your team works remotely. However, project management solutions like Monday allow you to manage your work and team in one workplace, ensuring effortless tracking, delivering, and planning. While it offers hundreds of customisable and visual templates, you can also develop your own to suit your preferences and needs.

Through automation, you can avoid repetition and minimise human error, allowing you to focus more time on handling essential tasks rather than correcting avoidable mistakes. Monday lets you visualise your work with views in the form of a calendar, map, kanban, timeline, and many more. You can reach the company customer support team at any time and even watch their tutorials, join every day live webinars, or go through the knowledge base.

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Video Conferencing

Zoom became a popular mode of communication when the pandemic became widespread. People had to stay home, so they started using Zoom because it offers an easy and reliable cloud-based platform for audio and video conferencing. You can use it to host an online meeting or as an instructional webinar tool.

While a free account accommodates 25 participants in a single meeting, you can add more people depending on your subscription. It comes with screen sharing, which aids in resolving issues and makes it easier to show and discuss different processes visually.

Conclusion

Since the pandemic thrust many people into remote working, workers have learned to rely on SaaS solutions to perform their duties. These tools have made the transition to remote working less challenging.

Mark Freebairn, Partner and Head of the CFO Practice at Odgers Berndtson, explains how organisations can overcome the limitations of Zoom interviews when hiring senior finance professionals.

Executive search is about understanding people – what motivates them, what they’re good at, what they’re proud of, how they behave when faced with adversity and whether they’re lying about what they’re telling you. All of this can be discerned through physical reactions – whether it’s a tapping finger, a twitching leg, holding their hands in their lap or even sitting straighter in their chair. These physical cues act as spotlights that give away important information about a person, so that eventually, a good 90% of them is revealed.

But when that person becomes reduced to a small box on your screen (which only shows their upper torso) you only get about 65 to 80% of the individual. When you’re appointing a new CFO or finance director, understanding only 65% about a candidate isn’t good enough, yet now more than ever, organisations need to make senior finance hires. Whilst the UK and other countries are ‘opening up’, many firms are still maintaining strict social distancing measures and the risk of second or even third waves means that remote interviews are here to stay.

The only option, therefore, is to overcome the limitations of virtual hiring by adapting the process so that both ‘fit’ and skills competencies can be successfully discerned over a screen, for what will be one of the most important appointments an organisation can make.

When you’re appointing a new CFO or finance director, understanding only 65% about a candidate isn’t good enough.

This should start with the expansion of the interviewing pool. By introducing the candidate to more people in the organisation – both formally and informally – you can start to build up a picture of that person from the opinions of others who may have elicited responses you may have missed or asked questions that you might not have thought of. Piecing together multiple views on a candidate enables the hiring party to assess cultural fit and also has the advantage of increasing candidate care. Perceived or otherwise, there is a heightened level of risk for candidates moving jobs at this time, and what’s more, many feel a stronger sense of loyalty to current employers so that even the most attractive roles require a more attentive approach. By introducing a candidate to more people from across your organisation, you demonstrate that you understand the risk the candidate is taking and that you are serious about the role in question.

Conducting more soft referencing achieves a similar outcome to that of increasing the number interviews – you can build an image of the candidate from other people who have worked with them and know them. By taking these references yourself, you can get a ‘first-hand’ account of who that person is, and ask the questions that reflect the needs of your organisation. For example, is this person going to fit in with our culture which is progressive, open to new ideas and less hierarchically structured? Or on the other hand, will this person help us move the needle on our organisation’s look and feel, which is perhaps more traditional in its thinking? These are things that can be surmised in person but are more much more difficult to find out over a Zoom call.

Another effective method of overcoming the limitations of virtual interviews is the use of scientific measures to evidence intuitive assessments of candidates, i.e. psychological assessment tools. These assess leadership characteristics such as how driven an individual is, whether they are capable of making courageous decisions or if they’re more inclined to take easier options, whether they are inclusive problem solvers or siloed thinkers and if they are risk takers or risk averse. These tools don’t just assess the attributes of the candidate in question but also how they fit in with the rest of the C-suite. They may be highly inclusive and determined but lack entrepreneurialism, which may be absolutely fine because you already have that behavioural trait in your leadership team.

These tools don’t just assess the attributes of the candidate in question but also how they fit in with the rest of the C-suite.

Finally, it is worth recognising the benefits of Zoom interviews. They will, at times, give you a deeper understanding of a candidate than if you were to meet them in person. When a wayward child or excitable pet crashes the interview, seeing how that person responds will give you a very good insight into what their character is like and how they deal with the unexpected. And whilst (the majority of the time) they are certainly more formal, making it harder to evaluate EQ and chemistry indicators, this does leave more room for competency assessment. Organisations interviewing for CFOs or finance directors should be asking questions to ascertain whether the candidate has been a strong guarantor of financial integrity, a good function leader, someone who can drive operational support and challenge all levels of decision making across the business, and is importantly a strategic partner to the chief executive or the managing director.

What’s more, a Zoom interview is a good indicator of emerging leadership competencies. If the candidate is patient, articulate, demonstrates the ability to listen and to read an interviewing panel’s ‘mood’ virtually, then they are more likely to have the sort of skills required for a future where they will need to lead teams both on-site and who are working remotely. We’re also finding that the absence of ‘physical presence’ in interviews is likely to be reducing unconscious gender bias and having the same effect as ‘blind CVs’ and gender-neutral recruitment.

Despite the challenges posed by virtual hiring and interviewing, you can still carry out a highly effective c-suite search and appointment during the pandemic. It is difficult, it can be overly formal and at times you may feel like you’re struggling to get a ‘feel’ for the candidate, but by adapting the process correctly you can overcome all of this and in fact, are more likely to identify and appoint the sort of leader that is fit for the new world we are emerging in to.

 Carl Slabicki, Head of Strategic Payment Solutions, BNY Mellon Treasury Services, explores the changing climate of US payments.

For a long time, banks in the US have competed primarily on price and service rather than as providers of payments solutions. But the payments and cash management space is now changing. New developments to existing payment rails, combined with the advent of new real-time solutions and overlay services are emerging, and organisations that are able to quickly adapt to the evolving payments landscape will be well placed to gain a significant market advantage.

As we enter this period of unprecedented disruption in the marketplace, the importance of expediting the journey from paper to digital transactions for payers and receivers is becoming increasingly clear; payments are faster, more streamlined and feature enhanced capabilities around validation, security and risk mitigation.

Certainly, in the current challenging environment, the continued investment in and implementation of digital solutions continues to highlight the timeliness of this initiative. Remote working has put a spotlight on the channels we choose to make payments, with the payments industry leaning more and more on a digital environment to stay connected and continue conducting efficient and timely business. So what changes are occurring, and how can organisations and their clients reap the rewards?

The payment system evolution

For over 45 years, the ACH network had been the core next-day batch settlements system in the US. But during its long tenure, the underlying ACH system – which is governed by the National Automated Clearing House Association (Nacha) – has continued to modernise and grow, with the latest figures showing an increase in transaction volumes of 8.1% year-on-year in Q4 2019. This growth has been driven by the increasing payment convenience brought about, in part, by the introduction of Same Day ACH (SDA), which from March 2020 has increased its transaction limit from US$25,000 to US$100,000 to help open up additional use cases for the market.

As we enter this period of unprecedented disruption in the marketplace, the importance of expediting the journey from paper to digital transactions for payers and receivers is becoming increasingly clear.

To meet that growing need, new payment rails are being introduced to replace legacy capabilities. For example, RTP® – the US’s real-time payments network – launched by The Clearing House in 2017, is providing real-time gross settlement on a 24/7/365 operating model. This is providing clients with greater speed, efficiency, convenience and transparency. What’s more, in a move that will further bolster the growth of faster payments in the US, the Federal Reserve has announced its intention to launch its real-time payments system, known as the FedNow^SM Service, in 2023 or 2024.

Improving security

Sitting right at the centre of the evolving US payments landscape is the move towards pre-validation services – foundational tools that are addressing security concerns that surround the entire payment process. Regardless of the payment channel being used – whether it’s ACH, Wire, RTP or other – the question remains: how do you know the payment or account data you have been provided for a transaction is correct and legitimate?

Indeed, the advent of new technologies that have enabled faster and more efficient payments sits at the intersection of another trend, namely the sophistication of fraud in the payment space. And, as people have settled into working from home environments, such security concerns have been further accentuated. The need to positively verify that an individual is authorised to transact on a paying or receiving account is, as a result, also becoming increasingly important.

It is for this reason that market leading banks are turning their attention to delivering solutions that enable real-time pre-validation – meaning the confirmation that a payee is the legitimate party occurs prior to a payment being sent. These solutions leverage a national shared database, such as the one maintained by fraud management and prevention service provider Early Warning Services, to validate the routing and account number, and verify the owner on the account, before the payment is sent. This increases security and risk mitigation, reduces fraud losses, and helps reduce the costs and processes associated with checks and other legacy payment systems.

Digitalising paper

Elsewhere, a host of overlay services are coming to the fore to address historical market challenges. For example, the migration from checks to electronic payments remains a significant pain point for cash managers. Though accepting and processing checks comes with a heightened risk of fraud and an array of manual processes, they continue to remain necessary as many businesses do not have the information required, or the technology interface needed, to send or request a payment digitally.

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To address these issues, directories that allow payees to securely register their payment details and identities electronically are emerging, such as Zelle® in the US. Owned by a consortium of banks, the Zelle directory allows users to register identifiers, such as an email address or mobile phone number – referred to as “tokens” – which, following a thorough authentication process, can then be used to send and request electronic payments. Banks will then pull that authenticated token from the directory to find out the beneficiary’s bank, before using ACH or the card network to settle the payment. Going forward, Zelle, with the support of some of its member banks, including BNY Mellon, is working with The Clearing House to add RTP as an additional settlement mechanism. It is hoped that these capabilities will be implemented within the next year.

And while Zelle represents an effective way to securely send electronic payments to consumers and small businesses, there is also a demand for this in the business to business or vendor payments space. They too want to reduce the time and effort it takes to collect supplier banking account information, validate and keep it updated, as well as ultimately reduce or eliminate paper checks. This is increasingly achieved through settlement networks such as Paymode-X®, the largest business to business vendor payment network in the US, with over 400,000 members, processing over $200 billion in payments annually. It allows clients to convert vendor payments from paper (check) to ACH with electronic remittance, with the potential to earn revenue share on payables.

Adapting to the “new norm”

With the emergence of real-time payments, updated legacy rails and a new layer of overlay services, the US payments space is transitioning to an entirely new payments culture. Developments are moving quickly, with many banks looking to outsource their solutions to a trusted provider that already has the technology available – enabling them to swiftly go to market for a fraction of the cost.

As banks look to transform in this way, it is vital that they are able to provide clients with the options and capabilities they need to enable their businesses to run effectively and efficiently in the new faster payments environment. There is not a single, optimal channel that can solve every issue and meet all requirements – making it crucial that banks have a variety of tools in their arsenal, ready for instant deployment. The opportunity to provide improved, digital services to organizations, with greater levels of security, ease and efficiency has arrived. By working together to achieve ubiquity and interoperability, banks are developing the modern tools necessary for delivering a truly optimised payments experience.

The views expressed herein are those of the author only and may not reflect the views of BNY Mellon. This does not constitute Treasury Services advice, or any other business or legal advice, and it should not be relied upon as such.

Is it time to consider how recent changes to our working habits, previously thought of as radical, may have set the example for how we will work in future? As the supposed importance of 9-5 hours is eroded, and with World Productivity Day just around the corner on 20 June, it seems like now is the time to consider whether greater flexibility with our working hours will lead to a more productive workforce - even in the ‘round-the-clock’ world of financial services. Daniel Bailey, Vice President, EMEA at Zendesk describes how this can be made possible.

Embracing flexi-time all the time 

With teams logging on and off at times that better suit their lives, how can financial service providers - whose industry operates across time zones and is based around set working days - be expected to become more productive?

When Microsoft trialled the four-day work week (with no reduction in pay) in Japan last year, productivity increased 40%. The reduced number of working days led employees to find ways to make meetings shorter and more effective, and subsequently, they felt happier and more motivated in their roles. Simply put, the change drove efficiency. Four-day working weeks aren’t going to become commonplace for everyone. Instead, employers can focus on making flexible hours the norm. This could mean allocating certain ‘core’ hours of work for your team, and allowing them to flex either side of this to accomodate the needs and demands of their personal lives. Offering employees this kind of flexibility can actually enhance efficiency and ensure your employees feel motivated.

When Microsoft trialled the four-day work week (with no reduction in pay) in Japan last year, productivity increased 40%.

Supporting team efficiency

If your staff are working flexibly, internal collaboration tools are one piece of the puzzle for making sure your teams are delegating and sharing work, as well as getting timely updates on progress across their disparate work hours. Financial services teams should implement intelligent tools. By doing so, clients receive advice more quickly, and without the hassle of being passed around departments. Requests received out-of-hours can be escalated if they are urgent, routed to staff who have chosen to work later or can flex their time back later on. As a result, even with fewer staff simultaneously online, communication doesn’t fall through the cracks.

Furthermore, these tools can pull data from inbound enquiries that offer insights into the work your employees spend most of their time on. Not only does this help to plan your teams’ time, but repetitive enquiries can be automated to provide round the clock, easily accessible support. A robust help desk can be built that helps your clients to find answers for themselves, providing a simpler experience for them and freeing up your employees time.

The human touch

In the financial services industry, clients want to know that their money is in safe hands. That requires personal connection, trusted account leads and employees who can demonstrate that they care about their customers. But moving to a more fluid workday doesn’t mean that this element of the client relationship is in jeopardy - it means that it must be central to what gets done in working hours.

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Considering the efficiencies mentioned above, enquiries now reach the right teams faster, and the repetitive requests are handled automatically. What remains are the most pressing concerns and queries of your customers, one where there is no alternative to human interaction to offer expertise and maintain trust.

A significant part of that trust is built on feeling valued and understood as a customer. A business equipped with the right tools can immediately see a history of the customer who has made contact, their previous issues and account information, to facilitate a genuinely helpful and personalised interaction. If multiple teams are involved in the customer’s account, it is quicker and simpler to share data from their interactions and teams, leading to timely resolutions and greater satisfaction - even in the flexible working day.

Outside of customer contact, the work time given back to your employees can be used for the creative and strategic work that boosts productivity and helps to grow the business, offering new services to your clients.

The flexible working week may sound like a pipe dream. But so did remote working at one point - yet in these unusual times, we’ve seen how resilient and capable employees can be, adapting to keep businesses running. When offered more control of their time, to focus on themselves and their personal and social commitments, and the promise of greater productivity and more rewarding work when they are in the office, working 9-5 could be the next relic from our lives before - dare we say it - the new normal.

As the Coronavirus (COVID-19) pandemic continues to spread there has been a worrying rise in harassment, bullying, and discrimination in the workplace. Initially, this was seen to be race-related - targeting people of Asian origin - but has since spread to include people who expressed symptoms of the virus. Now as large swathes of the global workforce move to a working from home model, employers are faced with a new challenge - that the vector for workplace discrimination will shift in parallel with the main mode of communication. Neta Meidav, co-founder & CEO of Vault Platform, explores this phenomenon below.

Tasked not only with rapidly implementing a company-wide working from home strategy to keep businesses that are still operational up and running, many HR functions are also operationally responsible for mass layoffs all while building a crisis information and communication plan out. Bluntly, HR teams are maxed out and will struggle to field a rising number of queries about the new workplace etiquette.

Law firm Lewis Silkin LLP estimates that around 59% of large multinational enterprises have already put into place a plan to respond to pandemic diseases such as Coronavirus. Typical measures include social distancing and remote working arrangements. The majority (88%) of are managing self-isolation by asking employees to work from home.

It’s difficult to actually get a handle on the number of people whose jobs allow them to work fully remotely, especially with such an unprecedented situation. But cloud security services firm Netskope, which routes corporate traffic for hundreds of thousands of office workers said it estimates that the number of American knowledge workers (white collar desk workers) logging in from home hit a high of 58% on March 19. This is up from an average of 27% over the last six months.

While there may be some anecdotal evidence that the untested shift to an emergency working form model is in fact working, it is early days and there is plenty of research that points to warnings we should all be heeding.

Bluntly, HR teams are maxed out and will struggle to field a rising number of queries about the new workplace etiquette.

A 2017 study by David Maxfield and Joseph Grenny for leadership training consultancy VitalSmarts found that just over half of people who work mostly remotely feel they don’t get treated equally by their colleagues. Now the obvious retort is that ‘we’re all remote workers now,’ so the playing field is levelled. But research suggests the problem is more with the medium than whether workers fall into the ‘in office’ or ‘WFH’ camps.

Some 30% of UK respondents to a survey by Totaljobs in 2018 said they had been victims of workplace discrimination on official corporate messaging platforms, such as Slack, Microsoft Teams, or Google Chat. In the US, a 2019 survey by Monster.com revealed that 39% of respondents had received aggressive messages from colleagues on similar tools.

Cyber-bullying has been well documented for some time and remains as persistent in the corporate workplace as it does in schools and colleges. A recent high-profile case focuses on the departure of the CEO of leading consumer brand Away after an exposé of bullying culture over Slack.

The revelations of Away are an anomaly - most incidents go unreported. The same studies show that 30% of workers in the UK (according to Totaljobs) and 34% in the US (according to Monster.com) who do experience cyberbullying suffer in silence because they are not confident they will be supported by their employer. Lloyds of London was exposed in December last year after their complaint hotlines were proved to be inoperative for 16 months due to unpaid phone bills, and in 2018 the Financial Conduct Authority put senior managers on notice that their futures in the City were at risk if they did not take diversity seriously, while companies faced fines after a 220% increase in interpersonal whistleblowing complaints over the previous 12 months. According to Totaljobs, around 8% find it easier to leave their jobs than to complain and request an investigation into the situation.

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Digital workers are disincentivised from reporting workplace misconduct in the same way as employees that spend all their time in the physical presence of their colleagues. Firstly, the available channels for reporting misconduct are intimidating; and secondly, they don’t feel confident their employer will act on the report.

But the fact remains that employers are legally obliged to protect their workers and that responsibility doesn’t change because they are now out of sight. While ethically, employers should take more care during these uncertain times.

• Remind your employees of your organisation’s discrimination and harassment policies and ensure that these are adapted for a remote-first culture (i.e. how they apply to discrimination across messaging apps) and are easily available.
• Encourage a speak up culture: stigmatising issues (such as with race-related discrimination due to COVID-19) can be challenging for employees to report. Without effective reporting tools in place, many will suffer in silence.
• Take reasonable steps to prevent discrimination and harassment : Typically, employers will only avoid liability in the event of a discrimination case if they can show they have taken ‘all reasonable steps’ to protect employees, such as implementing an effective and secure solution for reporting sensitive issues that take place in person or digitally.

With the entire world feeling the effects of the COVID-19 pandemic, many businesses have found themselves in a precarious position. While virtually every enterprise is guaranteed to feel some degree of financial sting, the safety of your most precious assets – i.e., your team members – is infinitely more important than profit during this trying time. After all, if your employees can’t depend on you to prioritize their wellbeing at this point in time, when can they count on you? Business owners and entrepreneurs looking for ways to help guide their team members through this global crisis will be well-served by the following pointers.

Fully Embrace Telecommuting

No matter what your personal views on telecommuting are, fully embracing it is one of the most effective ways to keep your team members safe throughout this crisis. In order to flatten the curve and control the rate of infection, people need to isolate as much as possible. The more time your employees spend outside of their homes, the more opportunities for infection they’ll encounter, and it won’t take long for a single COVID-stricken employee to infect your entire workforce. Since carriers can be asymptomatic for weeks before the infection becomes apparent, it may be too late to control the spread by the time the initial carrier is noticeably ill. Additionally, for some carriers, the virus manifests itself through mild to mid-level cold or flu symptoms, so the infected party may believe themselves to be suffering from something less serious and come to work sick. Keep in mind that even if a carrier only has a mild case of COVID-19, the people they spread the virus to can have far more serious cases.

It is also vital that lines of communication be kept open while employees are working remotely. For guidance on how to keep your business’s finances stable during this time, Shakespeare Martineau’s Chris von Strandmann has offered advice on developing effective contingency plans.

Keep in mind that even if a carrier only has a mild case of COVID-19, the people they spread the virus to can have far more serious cases.

Send Money to Employees in Immediate Need

Many of us live paycheck to paycheck. Due largely in part to an ever-increasing cost of living, building robust savings simply isn’t feasible for most members of the workforce. That being the case, a single medical emergency, furlough or delayed paycheck can prove financially ruinous. As such, if any of your employees are in immediate need of emergency funds, now is the time to be generous. Whether they’re dealing with steep medical bills, require help making rent or need money for food, there’s never been a better time to show your team members just how much they mean to you. Fortunately, there are many convenient ways to send money to people in need.

Relax Stringent Deadlines

The world has changed dramatically in a very short span of time. Not only has the virus caused many enterprises to change the way they do business, it’s prompted many people to rethink their individual priorities. With people concerned about their personal safety, worrying about loved ones and dealing with sick family members, some individuals have had no choice but to put career matters on the backburner. In light of all the outside issues your team members are dealing with during this time, you should consider relaxing stringent project deadlines. Work can still be important, but with a pandemic ravaging the globe, it shouldn’t be your team’s foremost priority.

On the subject of deadlines, if you are worried about the pandemic leaving you unable to complete your contracts, then you aren’t alone. Consider looking into whether these contracts might be mitigated by frustration or force majeure clauses.

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Giving Sick Employees Time to Recover

Few things are more difficult than effectively doing your job while sick. Additionally, employers who expect team members to perform their usual duties while stricken will illness generally aren’t looked upon favorably by the general public. With this in mind, allow any employee who’s fallen ill to take a paid break from work until such time as they are completely better. Their recovery is infinitely more important than any financial setbacks you may suffer.

For the vast majority of us, the COVID-19 pandemic is a completely unprecedented occurrence. Aside from the few centurions who were around for the Spanish flu, no one in the developed world has experienced anything of this magnitude in their lifetime. There’s no denying that this is a frightening time to be living through. With infection numbers increasing by the day and a definitive cure not currently existing, even the most levelheaded among us can’t help but feel tremendous worry. Additionally, given the scope and severity of this virus, businesses – and world economies – are sure to be adversely impacted. However, in these troubled times, it is imperative that the safety and wellbeing of your team members take precedence over profit.