“Never let a good crisis go to waste.” This quote by Winston Churchill (or former Chicago Mayor Rahm Emmanuel, depending on who you ask) was brought up by Stella Gan, the FIA’s head of operations for the Asia-Pacific region on the first day of FIA Asia-V, as speakers from all over the derivatives industry discussed via Zoom how the industry has adapted to the “new normal” in the wake of the coronavirus pandemic.
“ETD Operations: Adapting to the New Normal” took place on day one of the FIA conference. As one might expect, most presenters opened by repping their respective home teams, saying that their firms adapted nimbly to the global quarantine caused by the pandemic in 2020. Despite record-shattering trading volumes in March and pervasive volatility throughout the year, Max E., head of listed derivatives clearing product APAC for Deutsche Bank, said that his colleagues were able to perform “brilliantly,” although the extreme conditions stressed both personnel and technology. Most other panelists said much the same thing.
Automation was a topic that speakers frequently brought up while discussing how adapting to the pandemic might lead to lasting innovation throughout the industry. Nachi Muthu, global head of derivative products & solutions at Broadridge Financial Solutions, said that a big part of Broadridge’s success in coping with the challenges they faced in 2020 was a serendipitous investment in its technical infrastructure. “All the tech investment we did in the past several years helped us cope with volume changes,” he said. Neil Newby, executive director of global clearing operations at J.P. Morgan’s corporate investment bank, said the bank – as well as the industry – needs to “increase automation” and “work together as an industry to identify pain points.”
Although the panelists pretty much agreed that the industry had adapted well to working from home, the process was not without its challenges. Several speakers, including Newby and Senior Director of Service Delivery at FIS Vikram Bajaj, said that working from home posed unique operational challenges, especially for parents whose kids’ schools had suddenly closed. “Those of us with children I’m sure have newfound appreciation for the education industry,” Newby said. Bajaj reported seeing similar challenges. He also discussed how issues that would normally have been resolved easily through informal communication now required phone calls and Zoom conferences.
Besides operational obstacles, working from home presented plenty of social challenges as well. Bajaj said that one of the things he and his colleagues missed most were the simple interactions like going out to lunch. Yan Lam, vice president of post-trade business development at Hong Kong Exchanges and Clearing Limited, said that in the future, changes will have to be made “to ensure people working from home have less pressure” put on them. He also said employee productivity is tough to manage when everyone is working from home. “When you are interacting with managers and colleagues less and less, people aren’t seeing what you’re doing,” he said; this makes it harder to keep track of performance or recognize when people are working hard. One of the surveys posed to the audience during the talk asked, “Are you getting recognition for the hard work and hours you put in when working from home?” 52 percent of respondents said ‘yes,’ and 48 percent said ‘no.’
Another survey asked how many, if any, days employees should be allowed to work from home; 64 percent said that ‘2-3 days’ should be the norm, while 28 percent answered, ‘4-5 days.’ Val Mathews, executive general manager of operations at the Australian Securities Exchange (ASX), seemed optimistic about the potential for ASX – and the industry as a whole – to adopt a “hybrid” business model that will give employees greater flexibility to work from home, saying that “people have enjoyed” being able to work this way, despite its challenges. She said figuring out how to manage businesses “when everyone is remote, when some people aren’t – that’s the bit that we need to figure out. We need to be thoughtful…it’s about making sure we can improve and create flexibility.”