Other parts of this series:
The recent months of the escalating COVID-19 pandemic have involved a huge amount of disruption for everyone—in all locations, markets and walks of life. To help get economies and people back on their feet, I believe open data can play a key part.
The vast and varied disruptions up to Q2 of 2020
Employees have been off work in significant numbers due to illness and self-isolation. Many more, in key sectors, have seen their incomes and financial stability dramatically impacted by the disappearance of employment opportunities that are now looking increasingly like long-term job losses.
Organisations of all sizes have had their ecosystems significantly disrupted with mass shutdowns and the associated dire implications for revenues and cash flow.
Governments have tried to mitigate the economic and social impacts with stimulus packages for people and organisations.
Markets have been in turmoil as all this has unfolded, with volatile stock prices and slashed valuations, and little consensus on the prognosis for recovery as economies tentatively start to reopen.
The response to disruptions
Financial services (FS) firms have prioritised assistance for those customers most in need, while supporting colleagues in their new working patterns and taking prudent measures to weather what is anticipated to be a long-running storm.
Surviving this real-life stress test has been made all the more difficult by the extreme uncertainty about the duration of the pandemic, the evolving social controls, the depth of impact on customers and resilience in the markets.
However, the famous mantra tells us: “With uncertainty comes opportunity.” In the case of COVID-19, that means being able to provide the most effective responses for customers and colleagues, and to innovate rapidly to sustain successful organisations into the future.
The pivotal role for open data
Given that the imperatives of ‘the now’ are not going away, it’s prime time to be thinking about ‘the next’ and how the challenges of the second half of 2020 and beyond can be addressed. These are highlighted in our Responding to COVID-19 report.
There are significant challenges in setting a strategy from here, and depending on your perspective, these are quite distinct. Whilst acknowledging this is just a small part of the story, given the critical societal and healthcare facets to the crisis, here are the next steps for FS firms:
- For retail banks, it will be vital to truly understand a customer’s financial well-being and provide timely and appropriate responses for them at scale.
- For teams running credit operations, there will be huge value in having transparency and insight into back-book products. This will enable decisions ahead of time that mitigate growing liabilities or indicate an opportunity to emerge from the storm shelter ahead of the competition.
- For industry bodies, regulators and governments, being able to distinguish between healthy and unhealthy businesses, in order to target stimulus packages and support, will be important for making the most of limited resources and shortening the recovery time of economies.
In times of such rapid change, with so many variables and an urgent need to support people and organisations, the old ways of doing things—with a reliance on historical data and manual processes—are unfit for purpose. Simply having a retrospective snapshot of customers’ lives or organisational health presents challenges for transparency, insights and timely responses.
This doesn’t need to be the case forever, though. By putting to work the rapidly emerging open data capabilities that FS firms (and, increasingly, non-financial organisations) have been developing through Open Banking initiatives, better decision making is possible. This will lead to better customer outcomes and healthier organisations.
In my next post, I will share some examples of open data innovations that have been a force for good in the COVID-19 era.