In the wake of COVID-19, varying degrees of remote work have become increasingly common in how businesses across industries operate. Financial firms including hedge funds, quant funds, private equity firms, and others have been quick to adopt this new way of working as well. Now, 61% of CFOs at financial firms claim they plan to make remote work permanent for at least some roles, PwC reports.
Even so, financial firms continue to face unique challenges with remote work compared to those in other industries—not the least of which are challenges with regulatory compliance. In a high-profile case from 2021, regulators fined JP Morgan a total of $200 million due to “bookkeeping failures” driven by employees’ use of personal devices for business purposes where “WhatsApp messages, text messages, and emails were sent for business purposes,” PaymentsJournal reports. These incidents were uncommon before remote work became prevalent.
Fortunately, there are steps financial firms can take to ensure their remote work initiatives are successful. These include adopting the right IT solutions, prioritizing cybersecurity measures, adjusting workplace culture, and setting up remote work policies that meet operational due diligence requirements, among others. In this article, we explore these challenges and opportunities, with recommendations on how CFOs and IT leaders can partner to create remote work environments suitable for their firm’s and their customers’ long-term success.
Benchmarking the Industry’s Transition to Remote Work
As with other industries, companies of all sizes in the financial services and fintech spaces adopted remote work out of necessity. Even after the peak pandemic years, remote work flexibility has become an expectation among employees who want to spend at least some of their time working from home or other remote locations.
Fortunately, financial firms have seen largely positive results from their transition to remote work. 95% of financial services executives in PwC’s remote work survey report office workers who switched to remote work either maintained or improved their productivity; this took place in the early stages of the pandemic when sophisticated remote solutions were yet to emerge.
Now, experts believe both the cultural- and business-positive aspects of remote work have altered the professional landscape for good. “There is no question that remote working will remain dominant in the financial services industry for some time to come,” says Ric Edelman, founder of the Digital Assets Council of Financial Professionals, in a recent InvestmentNews article. “Rather than attempting to restore a pre-COVID culture, firms would be better off creating a new culture that reflects today’s business environment.”
Central Concerns Remain
Although the vast majority of financial firms—over 70%—report their remote work experiences have been either successful or very successful, according to PwC, there are still several challenges to remote work in the financial world.
As indicated, remote work can increase the risk of compliance violations, particularly when employees use personal devices or work in non-secure remote environments. Financial firms need to be sure they have the right IT solutions in place to ensure industry-specific compliance protocols are followed at all times.
Remote work also introduces new risks around data security, particularly as remote workers may store sensitive data on personal devices, such as home laptops. “When accessing sensitive data such as personally identifiable information (PII)… and any form of financial information in the home environment rather than an office, there is a possibility that someone could see the employee’s screen and the displayed information, compromising the client’s data,” CPO Magazine describes. IT leaders should consider managed-cloud native cybersecurity measures designed to protect and secure data and resources in remote work environments, without costly on-premise or IT staff investments for their firms.
Generally, reports about remote work efficiencies and productivity have been positive. However, remote work does introduce new risks to operations, including gaps in communication, collaboration, and data sharing between workers. IT leaders and CFOs must work together to design policies and adopt tools that reinforce remote work’s benefits and ensure any operational due diligence efforts yield the best possible results.
Remote work can pose challenges to company culture—for example, remote workers may feel isolated or disconnected from their colleagues, or remote teams may not be as cohesive or effective in delivering results. This can be particularly challenging for new employees: “Remote work is not helpful or workable in a growing number of industries that require training younger employees to be experts in their fields,” says Forbes. “It’s hard to train new lawyers and accountants on how to do their jobs if they can’t work alongside someone and learn how it works.”
CFOs and IT leaders must work together to ensure remote work is properly aligned with regulations, security, company values, and business goals; they must ensure all employees are willing to embrace remote work technologies as well, whether or not all employees will work remotely.
5 Long-Term Remote Work Solutions for Private Financial Firms
Whether you run a brand-name financial institution or a small private equity firm, there are clear steps you can take to ensure remote work is a viable and successful long-term strategy for your company. Here we take a closer look at five strategies for financial firms hoping to permanently and successfully establish a remote work and growth model for their companies.
1. Invest in strategic remote work technologies. Remote work requires specialized IT solutions that enable remote employees to stay connected, collaborate effectively, and remain secure over the long term. This may involve investing in remote-friendly devices or software, as well as implementing remote work policies that put compliance, IT security, and operational due diligence at the forefront.
2. Prioritize compliance training for remote workers. Ensuring remote employees understand and follow compliance requirements—particularly when it comes to data security—is critical to the long-term success of remote work at your financial firm. This may involve developing and regularly updating remote work policies or establishing regular compliance training to help remote workers understand the importance of cybersecurity and data security best practices. IT tools that contribute to ongoing compliance are also essential.
3. Foster effective communication between remote and in-office workers. Remote and in-office workers must maintain regular communication and remain aligned in terms of remote work practices and expectations. Consider adopting cloud-native digital tools that enable remote employees to easily collaborate and communicate with in-office workers, as well as remote work programs that encourage remote teams to maintain regular contact.
4. Adopt the right security practices and procedures. This may involve implementing remote work policies that address cybersecurity measures, conducting regular best practices audits, or partnering with IT professionals who can provide leading security capabilities, including secure access at the edge (SASE) and managed extended detection and response (MXR).
5. Establish remote work as a long-term growth strategy for your firm. Companies can enable greater success and innovation among remote employees and help their organizations stay competitive in a rapidly changing professional landscape.
Get the Greatest Value from Your Remote Strategy
Remote work can be an effective and successful long-term strategy for financial firms of all sizes when executed correctly. “A well thought-out, flexible work policy can help expand workforce diversity, foster collaboration from an expanded talent pool and enhance resiliency in meeting future crises,” as PwC describes. Financial firms that embrace remote work will be better positioned to succeed in a rapidly changing professional landscape.
Partner with Option One Technologies for Remote Success
The team of IT experts and consultants at Option One can help you implement remote work policies, design remote-friendly IT systems that support remote collaboration and communication, and establish remote work as a key part of your firm’s growth strategy. Contact us today to learn more.