Bankers, and others, are learning lessons of the new normal

Late last year I chatted to a couple of investment bank bosses about the way the financial markets had essentially gone home as SA moved into lockdown. Almost overnight, trillions of rands of daily trading in currencies, bonds and equities went to the bedrooms and living rooms of the traders, and those of their supervisors and regulators. And it did so at a time when the markets were going mad, trading unprecedented volumes as panic set in in the face of the pandemic. These are people who were used to sitting in hi-tech dealing rooms with multiple screens, people who weren’t even allowed to use their cellphones on the physical trading floor because of the risk of insider trading, or of collusion.

They went home. So too did the JSE, and our central bank, and much of the rest of the financial sector. A senior corporate and investment banker told of how some traders were tech-savvy enough to split their home TV screens into four to replicate the multiple Bloomberg and other screens they were used to working on in the dealing room. And despite the concerns in the market about compliance, there had been few if any incidents.

Standard Bank’s head of corporate and investment banking, Kenny

Fihla, described how the bank had thought its global markets business, where the trading activity is located, would work on a 50:50 split for people to spread across multiple buildings. “We didn’t believe we could continue to work effectively from home,” he said. But the bank rolled out secure platforms and it was possible for 80% to work from home.

Fihla says it was about trust. “We need to take that forward as we think about the business in a post-Covid environment,” he said. A second lesson was that banks’ procedures and mindsets can be the biggest obstacles in doing things differently.

As we come to SA’s lockdown anniversary this week, living on Zoom and Teams has become so normal it’s hard to remember how remarkable it was that financial markets and the financial sector responded so quickly and so radically.

Not that one should be starry eyed. There have been thousands of words written and studies done about the world’s WFH (work from home) experiment; the good, the bad and the ugly, from stress and mental health issues to how the trend has exacerbated inequality. Zoom and Teams may be productive and efficient but don’t provide collegiality, nor spark creativity and innovation. A Stanford study found that one reason people (especially women) found meetings online stressful and exhausting was that they had to spend so much time looking at themselves on the screen, as well as eyeballing others at unusually close quarters.

While many older executives don’t contemplate ever going back to the office full time, younger people are often desperate for the company. And while jobs like investment banking lend themselves to remote working, it’s been complicated for banks in SA to put WFH in place for operations such as call centres, where many workers don’t have homes that are conducive. Instead, some call centres have been de-densified, occupying some office space left vacant by the WFH brigade, though there are efforts to make more flexible working arrangements possible, even in low-income areas.

For now, SA is losing the race between the vaccine and the virus and we face a third wave. The crisis will have a long tail, in jobs that will still be affected by a changed economy and changed working conditions. The real estate market is unlikely to soon see the return of the old demand for office space. It will have a long tail too in the financial markets. No-one knows what wil l happen to the wash of liquidity that’s been pumped into global markets, nor what the consequences will be of the debt that countries have piled up. SA’s financial institutions have at least shown sophistication and resilience. And where there are positive lessons, bankers and others are learning from them.

SA’s financial institutions have shown sophistication and resilience