Global corporate finance faces reckoning in the post-COVID world

Global corporate finance faces reckoning in the post-COVID world

Looking ahead, financial institutions will need resilient, secure and scalable technology to operate in a more complex, remote world

Taran Khera, Head of Enterprise Sales for APAC at Bloomberg LP.

As the coronavirus outbreak continues to disrupt markets and economies worldwide, the finance industry is experiencing a tectonic shift across a wide spectrum of areas. Even as some markets start to re-open, the pandemic has driven the Wall Streets of the world to trial remote working. Banks and investment firms face profound operational stress while having to pivot their customer engagement strategies to a virtual interface.

Amid all the uncertainty is a question that now needs to be asked by all companies: how can we turn these changes into unique opportunities, and what will be the enduring impact of COVID-19 on the future of corporate finance in Asia?

Leveraging automated data and technology techniques

COVID-19 has upended virtual working and virtual finance. In one of the most seismic homeworking shifts in recent history, the financial sector – from stock exchanges to investment banks, had to ensure that their employees were able to stay connected, informed and productive. In the region, we have seen how financial institutions from Shanghai to Singapore, have adapted to mobile and remote technologies to run their businesses, and employing automated data and transaction techniques to transact.

The corporate banking and capital markets sectors in particular, have traditionally relied upon on-location and physical infrastructure. Sales and trading teams buy, sell and manage trades on the same floor, and are connected to secure trading and compliance systems. With COVID-19, remote working arrangements, video-conferencing and online trading from home are being tested in unprecedented ways. Over the long term, as work-from-home measures become more permanent, firms will need to consider how their technology can be resilient, secure and scalable in a complex, remote environment, and inevitably, regulators and governments will play a dominant role in this conversation.

With increased market volatility and liquidity stress, data is becoming vital to understanding current market dislocations. We saw market data ticks spiking from 100+ billion to 250+ billion per day, so automated data certainly offers institutional clients more control and insight into managing risks and making informed investment decisions. Expect to see a sea change in how the industry gets data delivered, consumed, used and shared across the enterprise, as companies work in vastly different virtual and more volatile environments.

At Bloomberg, for example, we have fast tracked the launch of a new data management service, Data License Plus (DL+ service), to support customers who are struggling to aggregate data during this time of historic market volatility. New data management services and tools have emerged at a time when many are struggling to aggregate data amid historic market volatility, providing data professionals with the ability to search, view and interact with market information more easily than ever before.

Innovating with purpose

With COVID-19, the corporate finance industry is undergoing transformational operational and strategic shifts. Operational costs and risks are increasing versus what is revenue generating and strategic to the business. Banks are being challenged by balance sheets, capital requirements and a highly competitive environment, where technology stacks can make or break your competitive edge.

These challenges have been increasingly difficult to ignore amid the pandemic. However, it has forced companies to find creative ideas to adapt and capitalize on a new set of investment opportunities. Innovation in times of crisis that comes through purpose, not by accident, can help firms gain an edge over the competition.

Tools used to track the outbreak of the virus and visually enable investors to identify their exposure to physical events that occur in geographical locations have emerged. Since the launch of Bloomberg’s MAP VIRUS tool in late January, usage has surged 300% since the outbreak, representing a 500% year-on-year increase in usage.

New customer engagement models in a virtual work environment

For many firms across the financial ecosystem, the COVID-19 crisis has impacted customer engagement strategies on multiple levels, as it pertains to technology, customer service and product delivery. Client relationships have to be central in uncertain, disruptive times. To survive and to eventually thrive, companies must find innovative client engagement strategies to generate new revenue streams and solve complex problems. Data and technology must be core to their strategy.

Where I work, our priority over recent months has been going over and above with 24/7 customer service and delivering on a robust and resilient technology system to support our customers’ business continuity, and the continued operations of global financial markets. Complex enterprise engagement projects continue to be implemented across the region, including execution and order management systems that recently went live with 10 of Asia's leading buy-side firms.

What the future looks like

The COVID-19 pandemic has certainly disrupted the world of corporate finance. Looking ahead, technology that scales and automated data tools will see extraordinary growth and rapid adoption, while firms will be pushed to innovate with purpose and rethink customer service models with renewed focus on operational resilience. The future of finance may be here sooner than most market participants could ever predict, and become more mobile, agile and customer-centric.

This article was first published on Global Banking & Finance Review.