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

Lorem ipsum

dolor sit amet

Lorem ipsum

dolor sit amet,

consectetur

adipiscing elit

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