Clearly the far-reaching consequences of the COVID-19 crisis are uncertain, and financial institutions' (FIs’) best practices are still evolving. What is certain is that institutions’ ability to cope will depend in no small part on their technology infrastructures. In some areas, such as cyber security, IT systems and anti-fraud, the technology implications of the crisis, such as the demand for real-time network data, are already crystalizing, while in others (such as the secondary securities market), the situation is less clear.
As with any crisis, the effectiveness of FIs’ response will depend on two factors: governance and technology. Firms that invested in quantification systems will likely be experiencing the pay-off, managing IT and cyber risk as thousands of companies transition and adapt to having an entirely remote workforce. Meanwhile, ongoing digitization, quantification and the development of analytics have created a rich and granular data environment, and now is the time to use it.
Those firms with significant gaps and inefficiencies in their technology structures will have to move quickly to identify their challenges and issues. To manage their risk exposure all FIs will have to develop new technology strategies and invest in systems and maintenance. Good governance and industry standards should guide any firm’s crisis response: how they act now could ultimately affect the reputation and resilience of the business.