The Impacts of COVID-19 on Bank Network Management

Blog post Team CENTRL 2022-03-14

The COVID-19 crisis has brought several changes to the global business landscape. The disruption of critical infrastructure services, especially financial services, has affected various industries worldwide.

The digital revolution has changed the demand for financial services and led the sector to become more customer-centered. However, it has also left incumbents with obsolete technologies, an overreliance on rigid mainframes, and an overextended branch network.

The long-term effects of the coronavirus pandemic have left a lasting impression on the banking industry and financial institutions. Today, we’ll examine some of those changes related explicitly to Bank Network Management (BNM) and how organizations adapt.

The most notable is the Business Continuity Plan (BCP) value for protecting banking services and risk management. Massive increases in market activity, along with unprecedented operational hurdles, conspired to put banks’ BCPs to the test.

Disruption in Bank Network Management

COVID-19 has accelerated some existing trends in the banking sector, temporarily reversed others, and influenced the private and public players in the industry. But, most importantly, it accelerated the digitalization and restructuring of the banking industry.

For example, at the height of the COVID-19 pandemic, network managers were forced to stop their onsite evaluations in observance of social distancing mandates. However, as the economy has recovered and social distancing requirements lessen, those onsite evaluations have re-commenced.

Still, there are other areas of the banking business that have been given a significant shift toward digitization, for example, the number of individuals desiring to remain at home and work remotely. This has increased reliance on cloud-based tools for both network managers and custodian banks.

While these centralized, cloud based tools are a positive step toward digital transformation for banking networks, they also represent new risks and vulnerabilities in cybersecurity that must be managed and mitigated to avoid disruptions and outages.

Planning for Business Continuity

Amidst all of this disruption, custodian banks with operational staff located worldwide were pushed to the limit, again owing significantly to having to transfer thousands of employees to WFH in a matter of days.

Some banks have proactively revamped their WFH policy to protect staff, with many noting the recent wave of cyberattacks as a motivator for their enhanced WFH approach. However, as COVID-19 continued, so too did the threat of cyberattack.

Thus, business continuity planning, which has always been a component of banks’ custodian monitoring, supervision, and assessment procedures, will play a more significant role as all players in a global bank network adapt to these rapid changes.

Additionally, the need for market information, trading and settlement delays, and the adoption of short-selling regulations, among other things, have all placed persistent stress on network management executives.

However, global custodians have held firm amid the crisis and sought to re-evaluate their BCP procedures before adopting them with immediate effect. Still, the rapid response and resilience evidenced throughout the custody industry have been a testament to those who work within it.

Learn more about how industry leaders are adapting risk and due diligence procedures in a post-COVID-19 world by downloading our latest whitepaper here.

BNM360 For Bank Network Management

CENTRL’s first-hand experience with bank network managers, agent banks, and financial market infrastructures has allowed us to observe what works and what doesn’t, hand in hand with BNM best practices that make effective global bank networks.

BNM360, the Bank Network Management Platform, is the most comprehensive platform for automating the global network and custodian monitoring process. BNM360 provides centralized document repositories, issue management, powerful analytics, and easy-to-use portals for agent banks.

The platform includes modules for Due Diligence Questionaries (DDQ) monitoring and RFPs, account management workflows, master agent bank and account database, and account recertification.

Built by leading technologists in collaboration with global network managers, BNM360 delivers significant operational efficiencies through highly automated workflows, collaboration, and customizability.

It also provides deep risk analytics, powerful regulatory compliance capabilities, and is highly cost-effective to implement and maintain as a modern SaaS platform.

Learn more about how BNM360 can help you adapt and stay resilient post-COVID-19 by booking a demo today.

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