Covid 19: A conversation with the Asset Service Provider Industry
July 2020

PwC Luxembourg has launched a paper Covid 19: A conversation with the Asset Service Provider Industry. It embodies a number of interviews conducted with CEOs of large Asset Servicing providers in Luxembourg – pinpointing the key challenges they faced, the lessons learned and the impact the crisis has had on the industry as a whole.

People – The Key Challenges

Logistics and Planning – The primary issue was determining who was already set up for working from home and who needed access facilities created. As this roll out commenced, there were practical issues around hardware procurement, with several CEOs describing mass purchase expeditions to the large local supplier Auchan & HiFi International in a procurement race for laptops.

The Personal and Human Side – Most CEOs reported their people missing the social interaction of their normal working environment and suffering from isolation, particularly singles living at home alone.

People – Lessons Learned

Decision Making – In the circumstances, there was no other option than to empower and trust local CEOs and their leadership teams to make local decisions. It worked! Comments like "80% is good enough" and "just do it" became the new mantra, and a recognition that agility, trust, experience and being "bold" are necessary styles of leadership and decision making in such extreme circumstances.

Management and Leadership – One anecdote describes how the CEO made it clear to all staff they have a direct line to him if required, and how one fairly junior employee at home simply could not get through to the IT help desk. The employee called the CEO, and was immediately surprised that he could indeed access him directly, and even more surprised when the advice from the CEO was to make a cup of tea, sit down and watch Netflix, until the queue for the IT help desk cleared!

Clients

Reaction – One of the CEOs put it perfectly in perspective "it was the best possible Business Continuity Planning scenario because everyone was in the same situation".

Client Communications – Different ways of communicating emerged, such as chat bot technology, video calls, and client events being replaced by virtual events. The latter was noted by several interviewees as an opportunity to have created a competitive differentiator.

Business Impact – The crisis was and remains a time to cement trusted relationships with clients that we are all in this together through seamlessly maintaining service levels, a proactive and innovative approach to transparent communications, a healthy introduction of new technology, and added value advice to help clients through their challenges.

Use of Technology

Data Security – Many now speak of the need for a retrospective ("cold light of day") review of what they implemented and to search for cyber risks which may have been inadvertently created. However, at the peak of the crisis, most CEOs were more concerned about the wave of phishing attacks which emerged, preying on the vulnerabilities of the global pandemic in the most obscene way.

Long Term impact – For the future, many are now realising the benefits of a Cloud-based infrastructure, where the giants of the industry can assume responsibility for massive resiliency, significant computing power, and a variable cost arrangement collectively appearing very attractive against the old world of in-house server capacity and resilience and a significant fixed cost.

Operating Model

Key Challenges – A massive volume of exceptions in the process, caused by market volatility, resulted in high volumes of false alerts, and in some cases decisions to amend thresholds temporarily.

Resiliency – In terms of sustainability, all reported they could sustain the current arrangements from a pure service delivery perspective indefinitely, but that there are challenges as regards people aspects (social interaction, ideas exchange, body language) and in conducting project related work.

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PwC Luxembourg has launched a paper Covid 19: A conversation with the Asset Service Provider Industry. It embodies a number of interviews conducted with CEOs of large Asset Servicing providers in Luxembourg – pinpointing the key challenges they faced, the lessons learned and the impact the crisis has had on the industry as a whole.

People – The Key Challenges

Logistics and Planning – The primary issue was determining who was already set up for working from home and who needed access facilities created. As this roll out commenced, there were practical issues around hardware procurement, with several CEOs describing mass purchase expeditions to the large local supplier Auchan & HiFi International in a procurement race for laptops.

The Personal and Human Side – Most CEOs reported their people missing the social interaction of their normal working environment and suffering from isolation, particularly singles living at home alone.

People – Lessons Learned

Decision Making – In the circumstances, there was no other option than to empower and trust local CEOs and their leadership teams to make local decisions. It worked! Comments like "80% is good enough" and "just do it" became the new mantra, and a recognition that agility, trust, experience and being "bold" are necessary styles of leadership and decision making in such extreme circumstances.

Management and Leadership – One anecdote describes how the CEO made it clear to all staff they have a direct line to him if required, and how one fairly junior employee at home simply could not get through to the IT help desk. The employee called the CEO, and was immediately surprised that he could indeed access him directly, and even more surprised when the advice from the CEO was to make a cup of tea, sit down and watch Netflix, until the queue for the IT help desk cleared!

Clients

Reaction – One of the CEOs put it perfectly in perspective "it was the best possible Business Continuity Planning scenario because everyone was in the same situation".

Client Communications – Different ways of communicating emerged, such as chat bot technology, video calls, and client events being replaced by virtual events. The latter was noted by several interviewees as an opportunity to have created a competitive differentiator.

Business Impact – The crisis was and remains a time to cement trusted relationships with clients that we are all in this together through seamlessly maintaining service levels, a proactive and innovative approach to transparent communications, a healthy introduction of new technology, and added value advice to help clients through their challenges.

Use of Technology

Data Security – Many now speak of the need for a retrospective ("cold light of day") review of what they implemented and to search for cyber risks which may have been inadvertently created. However, at the peak of the crisis, most CEOs were more concerned about the wave of phishing attacks which emerged, preying on the vulnerabilities of the global pandemic in the most obscene way.

Long Term impact – For the future, many are now realising the benefits of a Cloud-based infrastructure, where the giants of the industry can assume responsibility for massive resiliency, significant computing power, and a variable cost arrangement collectively appearing very attractive against the old world of in-house server capacity and resilience and a significant fixed cost.

Operating Model

Key Challenges – A massive volume of exceptions in the process, caused by market volatility, resulted in high volumes of false alerts, and in some cases decisions to amend thresholds temporarily.

Resiliency – In terms of sustainability, all reported they could sustain the current arrangements from a pure service delivery perspective indefinitely, but that there are challenges as regards people aspects (social interaction, ideas exchange, body language) and in conducting project related work.

Download the full report