Showing resilience in face of COVID-19

UniCredit’s Global Head of Securities Services, Julia Barbara Romhanyi, explores the impact of COVID-19 on securities services and discusses the way forward for the industry.

The outbreak of COVID-19 has left businesses of all kinds grappling with unprecedented challenges – be it financial strains, the health of the workforce, or the logistical issues surrounding remote working. The securities services industry is no different. In the face of these challenges, however, participants can be proud of the resilience they have shown.

It has certainly been a demanding crisis. In mid-February, when the first wave of infections was recorded outside Asia, UniCredit proactively issued a blanket ban on business travel while triggering contingency plans to mandate working from home for the majority of staff.

Our colleagues and customers’ health and safety has always been, and will remain, our utmost priority. From the onset of the crisis, we have acted decisively with this aim in mind – while taking prudent measures to ensure business continuity.

In some areas, the bank was already prepared for the remote working paradigm. Over the course of our multi-year strategic plan, Transform 2019, we launched an array of digital initiatives to achieve operational flexibility and develop scalable infrastructure. Thanks to these efforts, we were able to rapidly establish remote working capacity when COVID-19 struck – giving us a strong footing to manage the transition.

We reacted with decisive actions to protect employees and clients, and adopted a number of measures that were critical in helping curtail the spread of the virus within the bank, as well as in the wider society.

Thankfully, since UniCredit employees have had the experience of working from home for some time, much of the banking population was already equipped with the necessary tools when the virus broke out – those who were not, were quickly provided with laptops and monitors. These measures ensured all colleagues had proper access to the relevant platforms, and a new working rhythm for remote operations was swiftly established.

The unique impact on securities services

There have also been a number of challenges specific to the securities services industry. For example, in several countries, the working from home paradigm is hampered by the need to use physical documents for certain business functions, such as tax reclaims, as well as physically participate in annual general meetings.

To overcome this, UniCredit’s securities services had to identify solutions that would allow colleagues to effectively conduct their daily duties from home. During the peak of the crisis, in most of the countries in which UniCredit offers securities services, 100% of the workforce was working remotely. In the remaining countries, where regulations require paper documentation or physical presence, approximately 30% of staff were present in the office – protected by a raft of safety measures – in order to conduct critical tasks.

Now, as we approach the second phase – and the workforce gradually returns to the office – we have divided colleagues into two groups and set up a weekly, or bi-weekly, rotation system – alternating between the head office, and the Group’s back up sites. This is successfully limiting the rate of infection among the bank’s population.

And, as the data on infection rates continues to improve, UniCredit welcomed back more team members to its offices, as of Monday 22 June.

From surviving to thriving

Thanks to the pro-active measures taken early on, we have successfully managed the COVID-19 emergency for the past few months.

Of course, when it comes to working from home, certain factors prove more challenging to overcome than others. Those with young children, for instance, require a greater level of support than those without. Network speed, too, can be a big challenge – particularly for those with daily deadlines in settlement and net asset valuation.

The bank’s remote working policy has been critical in this respect – promoting business continuity, in spite of the challenging climate. What’s more, we have found it useful for colleagues to support each other by sharing “best practices” on weekly and monthly calls, which occur at a local, and regional level. These calls are also a chance to connect socially and share lockdown experiences. This kind of activity is key to preserving our invaluable “One Bank, One UniCredit” culture.

Despite the upheaval, we have been proud to see that the COVID-19 outbreak has had a minimal impact on our ability to provide a “business as usual” service to clients. Critically, we have proven that key functions can indeed be upheld remotely.

Promoting industry-wide digitalization

UniCredit’s robust business continuity plans, technology capabilities, and remote working policies already in place, meant there was in fact no need to adopt any drastically different policies, or to implement new platforms.

Indeed, we’ve already made telling strides across the board when it comes to the digitalisation of services for our clients. We have rolled out digital solutions across CIB product lines that are driving efficiency for both the bank and our clients.

That said, the pandemic has forced a much larger part of our work to be carried out digitally, making the digital platforms we have put in place more crucial than ever.

Indeed, the lockdown has given impetus to the digitalisation push – not only within the bank, but right across the industry, with paper-based processes being replaced by more efficient, digital tools.

While COVID-19 presents challenges, it also highlights the value of greater efficiency. With this in mind, it is heartening that major industry initiatives, such as CSDR and SRD2, remain broadly on course in spite of the pandemic.

However, as an industry, we can and should go further. Local legislation and infrastructure, for instance, need to be updated and modernised. This is something we have been lobbying for in several jurisdictions – promoting the application of digital signatures and digital notarisation to eliminate the need for physical documents.

In Bulgaria, meanwhile, UniCredit has been liaising with the local central depository with the aim of amending the rules that require international investors to use the central securities depository (CSD)’s electronic voting platform to select a proxy to vote for them at general meetings. The favored approach would be to allow the local sub-custodian to present a copy of the meetingspecific power of attorney, and vote on behalf of a respective international client – making the process more streamlined and efficient.

The new normal?

The pandemic is forcing changes and this gives us an opportunity to reshape the industry into one that is more digital, harmonised and efficient.

This “new normal” also gives us the opportunity to consider how we will return to work. The industry has already demonstrated it can continue to run efficiently in a remote environment, suggesting a more flexible working regime could be possible in the future, without compromising service levels.

While virtual interaction can never fully replace a physical meeting with clients or colleagues, there is much society can gain from this shift – not least the positive environmental impact. If rapid digitalisation can help save trees and forests and reduced traffic can decrease air pollution, these are tangible and inestimable benefits for society at large.

Naturally, questions remain over the feasibility of such a shift and our collective will to implement it outside a pandemic. Can we achieve a better work-life balance once the economy opens up? Will remote working become the new norm? While the COVID-19 crisis has posed many searching questions, these may be ones to which we can give a resoundingly encouraging answer.

Julia Barbara Romhanyi Global Head of Securities Services