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Exit? what Exit?: Weekly Roundup – May 30 2020:

Conversations this week have continued to centre around exit planning.

Although volumes of customers in arrears continue to be down, largely thanks to the government payment holidays, with over 1.5m payment holidays on cards and loan, and nearly 11m people on furlough there is plenty of concern that we are simply in the eye of the storm. The clock is ticking, interest still accruing and all this will all need to be unwound once the payment holiday schemes end. It could be ugly.

However we have been given the gift of notice and time for this. So exit planning, and using this ‘quieter’ time to plan for the known future is in many places underway – it is the smart thing to do. [At work we have been also refreshing our exit playbook, so happy to chat to anyone on this if interested]

But with all this talk of an ‘exit’ plan, in this post I wanted to pick issue with the work exit.

Exit implies a return, a return to normal, and the way things were, and I am not sure this is where we are headed.

Research (and maths) is pointing to a much more prolonged cycle, likely a second wave and some experts are starting to discuss the likely reality that coronavirus will never go away.

So it is any likely exit plan, in reality, need to be more of a transformation plan to invest now and set up the infrastructure for the future. So to help provoke discussion I have added some thoughts and questions below

  • Remote infrastructure – working from home, schooling from home will continue. Set up connectivity, think about your place of work and the working environment at home, and for homeschooling too
  • Remote working – Can this all be done remotely? How? Do employees only come in the office once a month… or at all? How do you keep teamwork and motivation high? (schools need to think about this too). What about new hires and training?
  • Office infrastructure – do you need as much office space? In a central location? What will the offices need to look like? More fun, collaboration, social – if people are infrequently in the function of the office will likely change
  • Digital journeys – how can 100% digital journeys be created? How can the number of clicks been reduced – it is all about removing customer friction
  • Fraud – Fraudster activity has seen a significant jump through this crisis. Digital is an opportunity for them, as with lower costs they can make more attempts. Make sure you and your company processes are protected (some discussion on whether this will hit FinTechs hard this week). How are you looking at this?
  • Supply chain shortages – another lockdown or spike in cases could result in another supply chain crisis. Are you prepared?
  • Business model – will this change? Some of the things we did before may no longer happen, how do you stay ahead of this curve?

For this new reality, the lucky money has the infrastructure already, the smart money, however [in my view] is using this time to invest and prepare now.

This may not be optimistic, but getting ready now, whilst we have this short window of opportunity will likely pay dividends in the future. We will be prepared and be on the front foot this time.

Have a good weekend everyone …. @chris_w_tweet

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Week 10 of lockdown: Where next…?

The psychological relaxation of restrictions seems to continue apace with traffic on the roads and beaches full, but the question top of mind this week is where next now… the observations for this week.

  • The volume of internet memes definitely seems to have subsided… seems we are all ready to get out and move on… certainly feels these observations are getting harder to find too.
  • I have managed to buy flour locally, so I have been making bread and yet more toasted sandwiches. In fact I seem to be focused on recreating the Pret-A-Manager menu… Pain au Raisin and Pain au chocolate are still to be perfected.. but who knew!
  • The COVID haircut… I finally gave in and got my first this week… not too bad to be honest, it is harder than it looks and I will be returning to the barber when they are open.
  • Work-wise we did have some clarity from the FCA on the payment holiday extension which was big news – however this prompts to think about what plans we would need for another 3, 6 or even 9 months! (there’s a cheery thought 🙁 )

Have a good week everyone… @chris_w_tweet

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May 22 2020: Weekly roundup

The big story at the end of this week was undoubtedly the decision by the UK bank regulator, the FCA, to extend the mortgage payment holiday period out by a further three months to the end of October.

This of course will be a huge relief to many banks, who whilst having seen volumes of customers in arrears drop the last few months (as people have used the various schemes), are expecting a huge increase once they end.

At the moment there are 1.8m mortgage customers in this situation, and this delay simply gives them more time to prepare.

For many customers, of course, interest is still being charged albeit not being currently paid. So the flip side of this announcement is a larger bill with higher monthly payments each month, will be due at the end of all this.

With more difficult economic news, this week, it is easy to see a situation where an increasing number of customers will now have more difficulty making payments.

And… the more this proverbial can is kicked down the road, the bigger the interest accrued and the bigger this problem could become. These things take time to evolve, but watch this space, it is likely going to get bumpy.

We have been discussing this scenario, for what seems like months now at work… the plans to help manage this….some tactical, some long term.

Fundamentally data is key. With this delay we do now have more time to gather new data, analyze the data we have, and get any (digital) infrastructure properly setup. The wave of change is going to be bigger, the risk higher – we have been given more notice and time to get ready to help. Now is the time on this.

In other news, there is also still discussion of negative interest rates in the UK rumbling around. This would be a first in the UK, and anyone with cash savings would be essentially paying to keep their money in the bank. This would be a seismic event. Although it may further reduce mortgage rates, this could be seen as another example of can-kicking. This is not to mention system impacts… I mean do we have confidence all the myriad of calculations in financial services work as well with a negative number?… this would keep me awake at night!

Lastly, the more fundamental changes in the workplace continue to appear to be moving with increasing pace.

  • There was this story regarding changes at the NHS, not known for being the most technically progressing, but being able to move forward :).
  • I also heard two instances of companies this week now reviewing their real estate strategies. Homeworking and flexible working is undoubtedly going to become more common and important going forward… (and secretly I think many of us, who are able to have the right set up at home (I would importantly qualify), are enjoying it too)!

Have a good weekend everyone…. @chris_w_tweet

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