Rungway CEO, Julie Chakraverty, joined an Investment Association panel to share her thoughts in their Webinar: “COVID19, the new reality and risk management”. These are some of the key takeaways from that conversation.
SPOTTING TRENDS: HURDLES TO MANAGING RISK DURING THE COVID CRISIS
Financial Services firms have found themselves having to adapt fast and at scale in response to Covid 19. In the initial fire-fighting phase, it meant tackling practical challenges to get the technology in place for home-working. And then it meant turning focus to the human factor, and supporting colleagues to cope with their own individual hurdles.
But the transition has shown us there’s a need to adapt well-established risk management, conduct and control frameworks to ensure that dispersed staff are properly overseen and supported to maintain standards.
IDENTIFYING RISK HAS BECOME MORE DIFFICULT
While the regulator’s expectations for risk management haven’t changed, the backdrop against which people are assessing risk is constantly shifting. We haven’t really seen a scenario in our lifetimes where so many risk factors are all disrupted at once; market volatility, mass reliance on technology and increased use of personal devices, low consumer confidence and rapidly emerging regulatory priorities. We’re used to some of these factors being in play, but to have them – and many more – present all at the same time creates a unique environment for monitoring and managing risk.
This gives firms a new and urgent challenge to measure and understand whether their existing control frameworks are working appropriately for this new risk environment.
WE’RE MEASURING CONDUCT ON A NEW PLAYING FIELD
The increased personal pressures that go alongside working from home, economic uncertainty and health risks put an added strain on the expectations that firms have of the conduct of their employees. And those personal pressures vary from person to person, from day to day.
“When clients have run Rungway Pulses of their employee base, asking how they’re coping during Covid, there is no one impact… ‘up and down’ is the majority answer. We see a lot of posts around anxiety and mental health. For example, having to do multiple group video calls each day if you’re an introvert, looking at each other’s faces quite intently can be stressful and draining.
We have people saying, ‘I’m trading off of an ironing board in a filthy flat and I don’t know how to clean or cook’. Or, ‘I’m LGBT and live alone so I have no human contact all weekend’ There is a huge diversity of experiences amongst your workforce.” – Julie Chakraverty, Rungway
Add to this the explosion of new communications channels and technology that people have speedily adopted to facilitate dispersed home working, and the landscape in which we’re measuring conduct has changed altogether. People are using multiple channels and personal as well as professional devices to do their jobs and maintain connectivity with colleagues. So, firms need to take into account these external factors and ask themselves what effective oversight and control looks like for these new ways of working.
TACKLING THE CHALLENGES: BRING PEOPLE TOGETHER, EVEN IF THEY’RE WORKING APART
Be agile. Fixed plans and assumptions don’t apply well to our new environment. So, risk and control assessment need to keep rolling with the punches of the crisis, being agile, dynamic and informed by as much data as you can collect to be fit for purpose.
Invest in welfare and people engagement. Critical to navigating this crisis and protecting robust risk management are cultural reinforcement and cultural connection with your remote workers to underpin their conduct responsibilities. By extending the reach of the company culture into new workspaces, companies can reinforce the sorts of behaviours, values and expectations the firm has, and enable employees to sustain them as the working world continues to change.
Innovate to engage employees. Firms need to go beyond the boundaries of their conventional experience to connect with employees in their new working environment at home, in the right channel. By doing so, they won’t just engage employees in their culture but they’ll be able to evidence to the regulator why and how they’ve adapted risk and conduct control to be most effective.
Companies using Rungway during Covid 19 have already surfaced some important themes from employees feeling empowered to post their views anonymously and ask for advice when they need it. The first being that while the impact of the crisis is a moveable feast for individuals, there are trends emerging across generations.
In some Rungways, employees under 25 have posted 100% anonymously, while those of the Baby Boomer generation rely on anonymity only two thirds of the time, showing employers the value of anonymity in turning up the volume of less heard voices. And the experience of working during the crisis is also proving to be very different between generations.
“Some of your younger people who have not been through 9/11, they’ve not been through [the crash in] ‘08, they’re finding the current situation overwhelming. So there’s no point just monitoring what they’re saying on a trading system, if they’re potentially feeling highly anxious, you need to address their resilience and mental health.”
Julie Chakraverty, Rungway
Build trust to build cultural resilience. By investing in protecting employees’ engagement and sense of connection with their company culture from home, firms can shore up and strengthen risk and conduct practices to face the inevitable challenges on the horizon.
The pattern of conversations seen on Rungway suggests that people from all communities and backgrounds will continue to strive for more flexibility now the myth that ‘front office can’t be done from home’ has been debunked. Some people are climbing the walls, desperate to return to shared workspaces. Others have thrived working from home or perhaps even become germaphobic. ‘Business as Usual’ has fundamentally changed, and individual circumstances will need to be handled with sensitivity.
By measuring the psychological safety, helpfulness and openness of a firm through behaviours in Rungway, it’s easier to gauge employee trust, and how it’s been affected by the crisis. For example, understanding the types of questions being asked before and after Covid 19, and which get responses more quickly, can indicate which priorities have shifted for employees. And seeing where senior people respond, make themselves visible and share personal advice can reveal how well support is flowing.
It’s these conversations that let firms connect their workforce as individuals, recognising that situations, needs and attitudes are quite distinct, even within one trading team. By bringing these conversations out into the open, you can connect people with your culture, wherever they work, and foster trust at a time it’s needed most.
“Without that fundamental foundation of trust, I think conduct, innovation, creativity, the things that we’re really relying on as core drivers of performance, won’t necessarily be there.” Julie Chakraverty, Rungway