The Covid-19 pandemic has presented business leaders with a mountain of challenges and a sea of often conflicting predictions.

Seeing through the complex layers of possibilities is an unenviable task. Nevertheless, senior leaders know they need to isolate a clear image of the future from the turmoil of the present.

Covid-19 has brought the longest uninterrupted growth charge in recent history to an abrupt halt.

But if recent economic history teaches us anything, it is that the major recessive cycles of the last 50 years usually present a tipping point for a new type of business cycle.

Companies that successfully navigated these business cycles were the ones that moved early to position themselves for the new future while those that adopted a wait-and-see strategy paid the price.

The pandemic is changing our societal and business cultures – our values, behaviours and beliefs. Some of these changes were already at play before the crisis, but they’ve now gone into hyperdrive.

The march of technology was already well underway for lenders, understanding what automation and technology can support broker experience.

Growing operational capacity

Now, the priority is suddenly for new processes to grow operational capacity for more complex underwriting of furloughed workers and mortgage deferrals.

Technology now plays a critical role in staff’s ability to work from home and IT spends have been diverted from some longer-term market share projects to tactical operational initiatives such as equipping staff with systems now primarily accessed from off-site.

Home working arrangements for employees mean elements such as private WiFi now represent real operational risk – either in terms of performance or security. Once, the only remote security concern was worrying if a laptop might get left in a pub or on a train. That was a simpler time.

Some plans have consequently bitten the dust while others that address the pressing concerns of ‘doing business’ today are now being included in the plans for the next 24 months.

Time for reflection

A period of reflection might feel like a luxury at the moment, but it is essential if organisations are to put the right foot forward.

These environments are unforgiving.  Lenders will need to think about how to leverage disruptive technology. For instance, how they can employ it to drive flexibility in their supply chain or develop partnerships to drive better business models.

Technology will drive better connectivity through digital transformation and the power of connection across value chains.  Companies need to improve their understanding of how they can build better solutions by harnessing improved bandwidth, mobile, video, behavioural data and analytics.

It will be important to leverage data to drive more efficient decision making, particularly in terms of underwriting, and will ask questions about segmentation and personalisation of different customer groups – and of employees – to understand them better, understand risk and match staff skills to assess it more effectively, ultimately to build stronger relationships with borrowers and distributors.

It’s not that the old ways were not good – it’s simply that the pandemic has ushered in a new era of looking at established norms and reassessing their value.

Companies will re-examine and ask questions about how they should address their regulatory obligations in sales and funding and how they should handle risk.

The layers are complex, and the solutions are manifold – all of them vying for our collective attention and none without advantages and drawbacks.

Seeing the wood for the trees is an art in itself. You’re entitled to feel a little overwhelmed, but help is out there if you need it.

Tim Hague is managing partner of Sagis