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PwC Nigeria's FS Webinar
COVID-19 and the Financial Services Industry
Thanks for joining:
Presentation starts: 9:00am
Conversations with Business Leaders
Operational efficiency and
managing your supply chain
Abiodun Falade Operations, Advisory Manager
PwC Nigeria
The Moderator
Welcome
Opening Remark
Andrew S. NevinPartner and Chief Economist &
West Africa Financial Services
Leader
Subject Matter Expert 1
Adedoyin Amosun Operations & Financial Services
Advisory, Associate Director
PwC Nigeria
Coming up next
COVID-19 and its impact on the Nigerian FS industry
Operational efficiency
PwC 6
DatePresentation Title
3
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6
NNPC Retail Limited Lubricants Business Plan February 2020
Content
Key concerns for the COO
Global responses to the COVID-19
pandemic: Operational efficiency initiatives
Key Operational considerations for the FS
Industry
COVID-19 pandemic: Key
concerns for the COO
PwC
Typical Risks and Challenges-Operations
8
The COVID-19
pandemic has put
Financial
institutions in a
business continuity
mode with the
resultant
challenges to their
operations…(1 of 2)
April 2020COVID-19 and its impact on the Nigerian banking industry
Adequacy of viable
alternatives for typical
branch operations activities
e.g. Card renewals,
POS/ATM issues, Cash
deposit
Negotiating/renewal of credit
lines for Medium and Large
Corporates
Impact on transactions in
transit e.g. Clearing cheques
& Transfer Instructions for
loan repayment/deposits
Providing Financial service
to the vulnerable-Elderly,
those avoiding digital
channels
01 02
03 04
PwC
Typical Risks and Challenges-Operations
9
April 2020Internal
The COVID-19 pandemic has put Financial institutions in business continuity mode with the resultant challenges to their operations…(2
of 2)
No premium,
No cover-
Renewals,
Extensions-
Corporate,
Micro and
Retail
Insurance
Risks of Arson,
breakdown of
Law and Order,
Counterfeiting
Support for the
Insured-Health,
Life,
Fire/Burglary
Motor vehicle
etc.
Communicating
with empathy
and impact
Balancing
Risks and
Controls in the
new normal
Managing
Service levels
Managing
Third-party
support
01 02 03 04 05 06 07
Global responses to the
COVID-19 pandemic: FS
Operations
PwC
COVID-19 pandemic: Key responses from global territories
11
April 2020COVID-19 and its impact on the Nigerian banking industry
Financial Institutions across the UK, USA, Hong Kong, EU, UAE, Australia,
Singapore have adopted various responses to address challenges as a result of the
COVID-19 pandemic
• Adjusting queueing arrangements and use of alternate counters to meet social
distancing requirements
• Leveraging intelligent automation to deliver on increasing volumes of loan modification
programmes and government-guaranteed SME loans
• 3-6 months moratorium on mortgages and credit card debts
• Waivers of ATM, Overdraft, early deposit withdrawal and maintenance fees
• Deferrals, reductions and late fee waivers
• Acceptance of electronic service for legal service
• Leveraging Video conferencing tools for Customer engagement
• Adopting digital signature tools for remote signing of documents
• Emergency fund to help tackle the outbreak. Further steps include a fast track claims
process and waiving deductibles
• Doubling the benefits for frontline healthcare workers who are hospitalised due to
COVID-19
• Access to medically advised COVID-19 testing, waiver of co-pays and other forms of
cost sharing
• Provision of technological expertise including the development of a smart image-
reading system to help speed up diagnosis of suspected cases of COVID-19
• Clear communication on changing waiting times, new service levels and work-arounds
United States of America
United Kingdom
European Union
Australia
Key Operational
considerations for the FS
Industry
PwC
Setting up your COVID-19 response: Considerations (1 of 2)
13
COVID-19 response strategy
Protect your stakeholders and plan your workforce
Workforce and Customers Operational focus
• Implement social distancing guidelines and infection prevention
initiatives at Customer touchpoints, Cash processing centres and
Contact centres
• Identify the critical work which delivers your P&L, the workforce
that do this and the capacity of your organisation to move labour to
sustain those critical activities
• Provide information to your teams real-time, communicating
changes and discussing the impact of these changes
• Ensure that there is full visibility of your people (location,
nationality, skills, etc.) and the right processes and systems in
place to track and move your workforce, where required
• Complete workforce profiling to understand where work levels are
likely to decrease or increase
• Celebrate successes
• Determine processes to be centralised/ moved to
central processing centres (with a focus on branch
processes and head office functions)
• Manage service levels to minimise waiting time and
customer frustration
• Enhance the capabilities of digital channels and
ensure appropriate distribution e.g. ATM kiosks
accepting STC cash, Biometric withdrawals,
Contactless payments
• Enhance your capacity to deal with rapidly increasing
volumes of delinquent accounts and loan modifications
within a short timeline. Ensure staff are trained to deal
with loan issues with empathy leveraging the
knowledge of the customer’s business and available
support programmes
• Simplify and communicate walk-arounds, loan relief
and other support programmes-e.g. Fee waivers for
ATM usage, Insurance deductibles waivers and early
termination of deposits etc.
• Deploy appropriate digital/ technology infrastructure to
support your critical business operations/ processes
(including contact centre, branch and ATM operations)
• Explore video conferencing options for Relationship
managers and Contact centre agents
• Integrate processes end-to-end, leveraging technology
to deliver the desired customer experience
Balance risk with the cost of control
Risks and Controls
• Create an internal and external stakeholder map for key
communications (considering staff, customers, suppliers,
regulators, etc.)?
• Develop a clear communications strategy that can be
implemented in a crisis to protect your reputation and
maintain the trust of your stakeholders
• Leveraging data, engage customers by sending
customised messages to various customer groups
showing empathy, communicating walk-arounds and
providing training on the use of digital channels
Maintain operational agility for business
continuity
April 2020COVID-19 and its impact on the Nigerian banking industry
Provide clarity to Customers, Employees and
other stakeholders
Communication strategy
• Develop a clear understanding of possible blind-spots for
additional fraud and execution risk arising from the
adjustment of existing processes (especially with regard
to supervisory functions and compliance operations)
• Create interventions and initiatives that have long-term
value
• Understand the existing process controls universe
(including the relevant costs) across the organization and
align this with the risk appetite and impact on customer
experience
Focus on data
• The impact of COVID-19 will vary from client to client
and as such, FS players need to leverage data to
model the impact on each sector and each customer
(subject to client specific- data)
• This should result in customized solutions and
communication for each customer group including
Vulnerable groups such as the elderly
Gain insight, assess your exposure to risk
and provide customised service
PwC
Thank you
Subject Matter Expert
Oladunni LawalOperations Advisory
Senior Manager
PwC Nigeria
2
Coming up next
COVID-19 and its impact on the Nigerian FS industry
Cost efficiency
PwC 17
DatePresentation Title
3
Lorem ipsum
dolor sit amet
Lorem ipsum
dolor sit amet,
consectetur
adipiscing elit
17
NNPC Retail Limited Lubricants Business Plan February 2020
Content
Key concerns for Cost Efficiency
Global responses to the
COVID-19 pandemic
Key considerations for the FS
Industry: Cost Efficiency
COVID -19 pandemic:
Key concerns for Heads of
Procurement: Cost Efficiency
PwC
Risks and Challenges
19
With the economic slowdown, there are heightened concerns around:
April 2020COVID-19 and its impact on the Nigerian FS Industry
Balancing reducing revenue with planned
third-party spend
Extracting optimal value from existing
supplier contracts
Operational constraints of managing
inflight projects and balancing spend/
outcomes
Inability to receive products/ services
due to global supply chain shut downIdentifying strategies for alternative
sourcing
Increased communication
requirements with suppliers and
other stakeholders 1 23
456
Global responses to the
COVID-19 pandemic
PwC
COVID-19 pandemic: Key responses from global territories
21
April 2020COVID-19 and its impact on the Nigerian FS Industry
Global Financial Services Institutions have adopted various responses to address challenges as a result of the COVID-19 pandemic
Centralising the procurement decision making process for all major/ strategic contracts
Establishing a ‘situation room’ (with a cost sub-workstream) where procurement and supply chain risk and mitigations can be
coordinated with other risk management teams
Reducing non-discretionary spend including rationalising spend (e.g. marketing spend and promotions) on non-performing
products and services
Postponing price increases and renegotiating all contracts and KPIs with service providers
Freezing non-essential recruitments, salary increases and overtime
Centralising activities/ processes (e.g. call centers) to capture scale and improve utilisation
Shutting down some branches temporarily (following a hub and spoke model) to emphasise flagship branches while closing
smaller, less used/ outlets in a similar vicinity
Donating unused facilities/ physical locations for public good
Key considerations
for Cost Efficiency
PwC 23
COVID-19 response strategy
April 2020
Setting up your COVID-19 response: Considerations
Finding ways to trim costs quickly
Cost Optimisation
Revisit/ review the annual spend budget and the book-of-work (including inflight
projects and recent proposal selections) to identify optimisation opportunities and
adjust where possible.
Quickly prioritise project spend, assess what can be slowed/stopped and what can
be redirected to initiatives with short-term impact, such as improving digital
servicing capabilities
Identify and triage all addressable spend (e.g. Procurement, Training and
Technology costs etc.) into appropriate categories e.g. “must have” vs. “nice to
have”.
Develop and implement measures/ guidelines to support accurate tracking/
monitoring of cost savings initiatives across the organisation .
Leverage existing technology/ processes to support efficient savings tracking.
Consider centralising the procurement decision making process for all major and
strategic contracts across the organization.
Define and communicate the process for incurring new costs (including defined
limits and Executive Management approval/ buy-in).
Seek to institutionalise a “cost consciousness” culture within the organisation
Supply Chain Optimisation
Protecting your supply chain
Renegotiate existing contracts with suppliers to reduce third party external spend without comprising value (e.g.
postponing planned price increases).
Develop a communications strategy and plan for dealing with your suppliers.
Consider redirecting spend towards local businesses/ SMEs that are going to need it to survive, including those
within your lending portfolios
Review/ update the requirements of key suppliers (such as facilities management and IT service providers) in
light of any requirements that may change during a pandemic period (e.g. increased cleaning regimes).
.
Identify and ensure continuous monitoring of exposure trends and restrictions against your supply chain
.Develop visibility of critical supply chain data to properly assess the potential challenges and create immediate
plans.
Leveraging classification of spend items into appropriate categories (e.g. strategic and non-critical), develop
supplier management strategies.
For critical suppliers, consider a review of their Business Continuity Plan (BP) to the extent possible, to better
understand their crisis response strategy.
Identify/ evaluate strategies for alternative sourcing, including substitutes for key spend items and alternative
suppliers.
Enforce continuous supplier performance management to prevent complacency.
COVID-19 and its impact on the Nigerian FS Industry
PwC
Thank you
All
Questions
Answers&
The Survey
Adedoyin AmosunOperations & Financial Services
Advisory, Associate Director
PwC Nigeria
Coming up next
COVID-19 Implications: COOs and Heads of Procurement Survey
April 2020
PwC 28
April 2020
The Survey respondents were drawn from across the FS Industry
Private Equity
5.9%
PwC
About 31% of FS Operations and Procurement executives believe that the impact of the pandemic will last for 3-6 months while another 31% see it lasting for and 6-12 months.
29
April 2020
PwC
Most Operations and Procurements respondents opine that the pandemic would negatively impact revenue and or profit
30
April 2020
Decreased revenue and/or profits
We do not expect any impact to revenue
and/or profits
It is difficult to assess at this point
Increased revenue and/or profits
PwC
Global recession (75.6%), Effect on workforce/Reduction in productivity (53.3%) and Market Volatility & Adequacy of operational framework (35.6%) are the top 3 concerns for respondents
31
April 2020
Global recession
Cybersecurity/Fraud threats
The effects on workforce/reduction in productivity
Adequacy of the Operational framework to meet the requirements of the new normal
Deterioration of support services because of internal challenges or supply chain problems
Lack of clear visibility of third-party spend
Maintenance of Service level agreements and controls as certain activities increase
Emergence of new blind spots for additional fraud and execution risk
Misalignment of the business strategy to operational/ cost management strategies
Market volatility
Misalignment of business strategy to risk appetite
Not having enough information to make good decisions
Lack of a comprehensive/ tested company emergency preparedness plan
PwC
44% of Operations and Procurement executives are of the view that their respective companies will recover from the pandemic in less than a month
32
April 2020
PwC
42% of respondents indicated that they will be delaying investment decisions as a result of the COVID-19 pandemic
33
April 2020
PwC
Thank you
Closing
Abiodun FaladeOperations, Advisory Manager
PwC Nigeria
The Moderator
PwC
Thank youThis webinar has ended
For more insights on how to respond to the business impacts of COVID-19
Visit our COVID-19 Content Hub
at www.pwc.com/ng/Covid-19
Access COVID-19 Resources on
PwC Nigeria's Tax 247 Mobile App
available on both Google Play Store
and the Apple App store