In line with global developments associated with COVID-19, we are reminded of the risk to business for financial services firms; with the risk of the cross-border spread of the disease, and the potential for reduced productivity and market confidence resulting in business vulnerability.
Laven (Consulting) Ltd and group companies (Laven) therefore feel that we should advise our clients and friends to refer to their Disaster Recovery procedures with a thought towards enacting their Business Continuity Plan (BCP) should that become necessary.
On a broader level, after internal discussion, we also feel it is also our duty to limit the spread of coronavirus and protect the most vulnerable in our society. This does not only include the elderly, but also those with chronic illnesses and respiratory disease. Although it is not easy to predict the course of this epidemic going forward, the Health Secretary Jeane Freeman’s worst-case scenario, that 80% of the population could become infected, should certainly be a cause for concern.
In light of the above Laven has decided to make all physical meetings optional. That is to say that no onsite visits will happen, and no new sales meetings will happen unless, at the request of our clients, it is deemed necessary. We believe that with Laven relying on our software (LavenTech), which includes a Document Exchange system and a fully compatible Compliance Monitoring system, this will not change the way we help clients. We will add the option of a conference call and or a video call for all meetings. If you are a client of Laven, your consultants will contact you in this regard. This will be applicable as of Monday 16 March 2020.
As for what firms could do, it would be beneficial for senior management to review and evaluate the quality of their BCP, considering whether their procedures effectively cover the current set of circumstances. This is particularly crucial given the current uncertain nature of the virus. Senior management should consider implementing internal policies towards reducing the risk of contributing negatively to this global pandemic and protecting their firm and their clients, as follows:
- Firms should review and revise their BCP in line with contemporary issues, to include newer risks and possible outcomes of the situation,
- All employees should be aware of the firms’ BCP
- Firms should then make clear the procedures that will take place as a result of enacting the BCP,
- Firms should make sure that individual employees have the ability to work remotely. This should include an assessment of the firms’ technological infrastructure ‘access to laptops, office telephone, emails, files, and any business-critical software’,
- Firms should establish an effective communication plan whilst some or all staff work remotely, including arranging internal check-in meetings and ensuring the staff contact list is up-to-date,
- In the case of all-personnel remote working, firms should contact the necessary external parties to inform them of such a decision,
- Firms should review the ICAAP or related capital adequacy considerations,
- Firms should reduce physical meetings and have rules on when those should be necessary,
- Firms could limit all travel including international travel,
- More internally firms could also take office-related sanitary measures.
Furthermore, firms should specifically consider how prepared their business is when facing a pandemic and consider whether the BCP is flexible enough to cover a wide range of resulting possibilities from the virus, as listed below by way of example:
- System disturbances
- Travel bans
- Reduced workforce as staff may become ill
- Increased remote working
- Market collapsing or becoming closed
- High volatility
- Models for risk or trading not suitable for market conditions
- Client loss
- Failure to obtain new business
- Failure to operate through the internet if in high demand
In taking these steps, and having an effective BCP, firms can ensure that they have made essential efforts towards protecting and sustaining their business, in line with the FCA’s statement on Covid-19.
For further information on the pandemic, please see, amongst other sources, the McKinsey report on the COVID-19 business implications, detailing a thorough review of the actual virus.
Should you need any assistance from Laven in the meantime please do not hesitate to get in touch via:
- Contact Form
- Email: [email protected]
- Phone: +44 (0)20 7838 0010
