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By Huw Jones
LONDON, May 12 (Reuters) - Many of the City of London's
bankers and traders will be working from their kitchens or
bedrooms for at least a year under some scenarios being planned
by finance companies in Britain.
Banks, insurance companies and asset managers have had to
work remotely since the country locked down in March to fight
the coronavirus pandemic.
The radical shift from trading floors to people's homes has
been deemed a big success in coping with record breaking
volatility across financial markets. As a result, the City of
London's financial services companies are in no hurry to go back
to business as usual.
"Now the technology for working from home has been proven,
firms are doing a lot of thinking and some of the changes we
have seen could be adopted in the longer term," Andrew Rogan,
director of operational resilience at UK Finance, a banking
industry body, said.
"Banks are working on multiple return to the office
'scenarios', including one where most staff still work from home
in the medium term," he said.
Prime Minister Boris Johnson has set out a gradual easing in
lockdown restrictions, but finance industry watchdog the
Financial Conduct Authority said it was still the case that for
now only "key workers" in the finance sector should travel to
their offices.
Restrictions are expected to be lifted further in the coming
months, but many firms are anticipating a very gradual return to
work as densely packed high-rise offices with crowded lifts are
tough places to implement social distancing.
NEW WAYS OF WORKING
Banks are facing mounting losses on loans to companies and
households as Britain heads for its deepest downturn in 300
years, increasing the pressure to cut costs, bankers said.
In the past, banks made savings by cutting staff and
bonuses, but the success of working from home has pointed to
other ways to save money via office space, back-up sites and
also technology.
"By introducing reduced hours, branch staff have also been
able to support contact centres and this additional activity
could form a blueprint for how branches could be used in the
future," Rogan said.
Banks are under pressure from lawmakers to avoid closing
more branches and finding other uses for them could be one
answer.
Barclays CEO Jes Staley said last month that the notion of
putting 7,000 people in a building in London's financial
district may be a thing of the past.
"I don't think any of us imagined quite how effective it
would be working in this way, holding board meetings, holding
discussions with multiple participants," said Norman Blackwell,
chairman of Lloyds Banking Group, told a City &
Financial webinar.
"We have all learned that we can do things in ways in future
that will drastically cut down the amount of travel we all do
and drastically reduce the amount of office space we need."
British property company Land Securities, which
owns several properties in London's financial district, said on
Tuesday that only around 10% of its office space was in use at
the end of March.
ZOOM FATIGUE
Some City of London businesses are looking at ways to get
staff back into offices, with the London Metal Exchange asking
employees how they feel about returning, its CEO Matthew
Chamberlain said.
"There are people raring to get back, but also some are very
understandably concerned about the commute," Chamberlain said in
reference to avoiding infection on London's normally crowded
transport network.
"What we see is a very gentle lifting, which will see people
who aren't comfortable coming in working from home for
potentially the next year," Chamberlain said.
The LME has suspended metals trading on its circular trading
floor, known as the "ring", where traders shout and signal
trades to one another.
"The ring will come back. I think it will be a while as you
can't have a socially-distanced ring," Chamberlain said.
The government has said that those who can work from home
should continue to do so for the time being.
With home working here to stay at least for the medium term,
companies are looking at how to protect themselves more
effectively from cyber attacks.
"As insurance moves to more remote working, there is a
greater risk of fraud and hacking," said Bruce Carnegie-Brown,
chairman of the Lloyd's of London insurance market.
"We do now need to ensure we have resilience in remote
working systems," he said.
Home-working has its fans and detractors. For some financial
industry staff it has brought welcome flexibility, while others
feel that physical, face-to-face interaction can solve issues
faster than an online meeting using Zoom or Skype.
Anne Richards, CEO of Fidelity International, said the asset
manager has been able to improve engagement with clients during
the pandemic.
"What will be interesting is whether we can sustain this in
the next 12 or 18 months because people do get Zoom fatigue,"
Richards said.
(Reporting by Huw Jones. Editing by Jane Merriman)
