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Navigating Regulatory Waters: Friend or Food? How To Stay Ahead in Financial Services

The following content is part of our fortnightly newsletter eDMs "Take A Beat Thursday" and was originally sent out on February 8th. If you'd like to join the list and get these in...

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Insights.

 

Companies need to change how they collect data as consumer behaviour changes rapidly during - and beyond COVID-19.


1. Market Feedback

Intelligence about the impact of COVID-19 on specific financial services sectors, not published by media. 

A. What you’re telling us about investment opportunities: “new but few”

Investors in larger funds see “new but few” investment opportunities. These include interest in private credit and debt opportunities.

A growing minority of you are also talking about decarbonisation as an investment theme. We’ve had ESG criteria for some years in the industry, and those offerings have grown, but the way some fund managers are now seeing decarbonisation is as a seismic shift coming up right after recession and COVID-19 as a fundamental shift.

Previously uninterested investors (outside the large super funds) such as family offices, smaller institutions and private (sophisticated) investors are signalling they now see ESG as essential in a greater proportion of portfolios and the underlying assets. Climate change risk is now squarely on the agenda as C19 sensitised investors to their vulnerability to major shocks.

Speaking of retail investors, there are still delays establishing new broking accounts and margin loans, as there have been for weeks. Nab Trade is still warning new would-be share traders there are delays in open accounts due to volumes. One old style (real human) stockbroker said March was one of their biggest months in history, but they now expect it to be quiet for some time even through EOFY. In other words, some investors have acted on the adage “sell in May and go away”.

Many fund managers are working harder, often for less money, though that isn’t all bad news. Portfolio changes, arbitrage opportunities, liquidity needs, and the odd opportunistic trade all demonstrated clients need them in this time of crisis. In other words, much higher client need, engagement and in many cases perceived value.

Overall, we’re seeing more confident fund manager action compared to past crises. During the GFC, many investors hadn’t faced those levels of asset price volatility and wild market behaviour. It too was an unprecedented event in part. Every crisis is. This time, it seems like the market is more mature, investors have been able to draw on experience and thus responded capably rather than just fleeing or freezing (in terms of being able to make decisions but also freezing of actual funds).

2. Management responses

This section outlines how CEOs and their leadership teams are responding

CEOs are now very much focusing on the medium term. For many of you that means restructuring, in almost every sense of that word.

The worst reading is that some leaders must financially restructure their businesses or parts of it to be viable. Some financial services businesses face profitability, solvency and liquidity issues.  There are those with real reported financial viability challenges (no BlueChip clients) who won’t make it or won’t make it in their current form.

Others facing a different longer-term market – particularly where revenue is immensely challenged – are cutting staff and costs and restructuring the shape of the organisation. In many cases there’s careful consideration of what aspects of a business are still fit for purpose.

In others, there’s no burning platform, but there’s an opportunity to make careful and considered changes you may have moved on even without COVID19. We’re starting to see those decisions play out.

The inbound questions we’re getting are a lot about how many of you are planning to return to the office. More on that soon as we dedicate a webinar to that topic solely. Register your interest here.

3. CEO guidance regarding coronavirus responses

This section provides our guidance on management and communication responses

A. Reconsider your marketing measurement. What will you stop, start and continue?
  • Start: investing in structural upgrades, if you’re not already
  • Stop: major strategic projects and face to face measurement (and more)
  • Continue: among other things, measuring critical channels and campaigns, pretesting and invest in major upgrades

This is all from Think with Google – their “Inside Google Marketing: marketing measurement in a pandemic” article to offer clear advice – what’s above is straight from that article and echoes what we’re seeing, doing for our own firm and advising clients to do.

B. Recreate your corporate and leadership fame agenda. What you want to be known for, now?

If you haven’t rethought your leadership and brand’s ‘fame agenda’, do it in the next few months. Make sure the goals are clear. Make sure that if you publish on this, and only this, you’ll do well in search. That’s not because SEO is the be all and end all, but because results there will be one way to measure how focussed your thought leadership or content is, and how successful you are at establishing an audience for your expertise or reaching those who want the answers you have.  

C. De-risk your communication. Gather stakeholder data religiously, only what you can use, then use it.

Set up systematic forms of gathering such data. That’s relevant data – be it behavioural analytics or verbal feedback, social media monitoring or stakeholder feedback surveys – this must be insight you can use. By ‘use’ we mean insight that helps you understand, predict, meet stakeholder expectations.

You’ll know you have it right when you or your team are pulling communication that would make you seem out of touch or tone deaf, and you’re creating content that’s answering common questions, addressing known or anticipated fears or speaking directly to observed behaviours of your clients, customers, members or audience.

The impact of the pandemic has been highly varied for different organisations. If the Royal Commission was the financial service’s great shove to improve our ability to meet community expectations, COVID-19 is the great moment to show we know what those expectations are. On this front, some of you are winning, some are surviving, and others are thriving.

4. Appendix: How to help us help you

This briefing is collective intelligence gathered, anonymised and shared with you by my firm for the greater good. We’ve taken the view, based on client feedback, that the collective benefit to you all takes precedence over normal competitive pressures at a time like this.

This is an excerpt from one of our client COVID-19 CEO response briefings. For more COVID-19 response resources and guidance, visit our COVID-19 Response page

If you’d like to discuss adjusting your communication strategy for the current times, please call us or fill out our contact form here.

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