What keeps New Zealand bank executives up at night?
Bank executives are worried excessive working from home is making it difficult to create a cohesive culture, KPMG’s 2023 review of banks reports.
It’s one of a number of concerns that bank executives have, KPMG, which sells services to banks, says.
KPMG conducted an anonymous survey of bank executives to find out what was on their minds before the publication of the report.
“Survey participants have noted that work from home, or the use of hybrid or flexible working spaces are still being used within the workplace,” said KPMG partner John Kensington, who authored the report.
“It was something that hadn’t returned to a new norm, It is a real struggle to maintain a cohesive culture when employees are working remotely. However, there is a fine line to rebalance and mandate compulsory ‘office days’ without risking reducing team morale and culture further,“he said.
Reduced collaboration time was also seen by executives as reducing the speed at which teams can tackle challenges.
“Trying to encourage the majority of the population that have been hit the hardest by the ever-increasing costs back into the office has proven difficult,” Kensington said.
Working from home had saved time, and money for workers, he said.
In February InternetNZ, which operates the .nz domain space, said three in five people had jobs which allowed them to sometimes work from home.
It said just over half wished they could work from home more, but their employers were not keen to let them.
“Being required to work in the office by an employer for a certain number of days remains the most common barrier to people working from home more,” said InternetNZ chief executive Vivien Maidaborn.
“Many people who adjusted to working from home are reluctant to change back,” she said.
In January, economist Matt Cowgill from employment marketplace Seek, said before the Covid pandemic, only 1.3% of job adverts indicated that the role advertised could be done from home. By December last year, that had risen to 8.9%. There were several other key challenges being faced by banks, executives told KPMG.
Revenue dipping: “Despite demonstrating strong performance, many banks that we spoke to now anticipate a slowdown with rates flattening and revenue dipping in the second half of the year.”
Fraud compensation: Bankers are worried that they will be forced to compensate more victims of scams and fraud for their losses, however, they have been accused of mischaracterising the threat. “Survey participants noted that the quantum of cyber attacks and scams have increased significantly,” Kensington said.
The AI threat: Banks are worried about artificial intelligence being deployed in cyber attacks against them. “The affordability of AI applications makes it challenging for survey participants to invest in sufficient resources in defence measures. Therefore it is crucial that banks employ further cybersecurity strategies to minimise any risk associated with AI powered attacks,” KPMG said.
House prices: “The banking sector is optimistic that the new National-led Coalition Government will be more business friendly resulting in a boost for the economy,” KPMG reported. Some problems were “baked into” the economy, however, they felt. That included stuttering house prices.
Miserable customers: “People are feeling worn out due to the constant uncertainty and range of challenges they have faced all packed into a relatively short timeframe,” Kensington reported. “These accumulated events have led people to become more outspoken about the things they do not like,” KPMG said. “Many in the banking sector are seeing the frustration of the average person being taken out on frontline staff.”
Over-exuberant climate teams: Bank executives moaned to KPMG about the scale of the new climate-reporting required of them. They also worried about the “excitement, exuberance and desire” of their climate teams to report in great detail, which clashed with “the risk awareness of senior management and directors around the impact that such detailed disclosures could have on their businesses”.
Rising unemployment: While bankers felt unemployment would have to rise a long way to threaten the economy, a sustained increase would have a big impact on the banking sector, banks told KPMG. They were modelling gloomy forecasts, and that was leading them to provision more for losses on loans.
Despite the challenges, bankers were optimistic for improved business sentiment, and less of a snowstorm of new regulation under the new government.
They were also hopeful that the new Government would remove, or at least modify, some regulation, including reducing the fines bank executives could face when their banks broke lending laws.