A risky business?

Dec 07, 2020
Niall McDonagh identifies the critical risks in virtual business and how to mitigate them.

In December 2019, the Government of Ireland published a research report titled Remote Work in Ireland, Future Jobs 2019 as part of a broader initiative to increase participation in the labour force and ensure Ireland’s economic success. The findings were positive, with Heather Humphreys TD, Minister for Business Enterprise and Innovation saying, “If remote work is embraced as part of innovation and technological change, it has the potential not only to increase participation in the labour force, but to improve productivity, attract and retain talent, and assist in the transition to a low-carbon economy.”

What no-one could have predicted is that just four months later, most of the world would be in lockdown due to the COVID-19 pandemic and remote working – for the sectors that could support it – would be widely implemented almost overnight. As many companies quickly moved to remote working, the focus was mainly on keeping business running as usual. Meanwhile, we adjusted our lives to deal with the other stresses the pandemic brought with it, like protecting vulnerable family members and home-schooling.

Nine months on, the virus is still prevalent. As offices begin to reopen slowly, and with strict social distancing measures in place, it is clear that remote working will continue for many. And while both the benefits  and challenges of remote working were broadly understood before, business leaders and employees now have a greater understanding through experience of what they truly are.

Financial Risk Solutions enabled its 30-person team to work from home during the lockdown. The transition was smooth, and with this experience, I can share some of the downsides businesses may face in operating virtually, and how they can overcome them.

Overcome access issues by moving critical business processes to the cloud

Businesses with manual or offline processes can face enormous challenges when working remotely. We have seen this first-hand in the financial services sector, where some fund administrators manage multiple complex spreadsheets to calculate unit-prices on funds. Often, these mission-critical, in-house-built spreadsheets are stored locally on a business server or, even worse, on a single employee’s PC, making them difficult to access from home. There are examples of massive failures, where some funds use the previous day’s unit price since lockdown because the sub-standard spreadsheet-based systems cannot cope in the remote working world. Investing in dedicated software and cloud-hosted technologies for critical business processes and daily administrative functions like CRM, accounting, file collaboration, and team communication is the simplest way to overcome such problems. It is also cost-effective and fast to set-up and scale hosted services, as there is no need to invest in any on-site IT infrastructure.

Reduce fear and uncertainty for your team with frequent and transparent communication

With stress for many at an all-time high, frequent and transparent communication is more important than ever. While colleagues may work in different locations, there is more than enough technology available now to stay connected, and you must make the most of it. Check-in with your team regularly, encourage them to ask questions about the business and share their concerns. While you might not have all the answers, sharing what you do know can go a long way in ensuring that your team stays motivated and focused on the business of delivering a great product or service to your customers. Set ground rules about communication methods and frequency to keep projects running smoothly.

Inspire innovation at a distance by talking to your customers

The increasing uncertainty and fear brought about by the pandemic have made it more difficult for businesses to create the conditions needed for innovation. Yet, it is precisely these conditions that require us to think differently and develop solutions to new problems. Now is the time to double down on conversations with your customers to better understand the issues that keep them up at night and think creatively about how to solve them.

Mitigate reputational risk by bolstering your compliance systems and policies

Remote working has added further complexities to governance, risk and compliance (GRC) for businesses. Take the EU’s General Data Protection Regulation (GDPR) as an example; firms need new security processes and policies to ensure that personal and confidential data is protected in remote working environments. To that end, Data Protection Ireland published a useful infographic for businesses to share with employees.

In the financial services industry, as assets under management continue to grow, so too does regulatory pressure, which puts fund administrators and insurers under greater scrutiny than ever before. The Central Bank’s review of outsourcing and UCITS performance fees are just two examples. Robust technology monitoring and reporting systems, combined with up-to-date policies and employee education, are critical to mitigate risks and support growth in businesses of all shapes and sizes.

While 2020 will long be remembered as the year of the COVID-19 pandemic, I hope we can also mark it as the year digital transformation took hold and we came together, from a wide range of industries, to support remote working at scale and enable our economy to operate in such challenging circumstances.

Niall McDonagh is Financial Controller at Financial Risk Solutions.