“We don’t need myths, we need examples to be followed. Examples of courage, determination, hope. We need to believe it’s possible to win. And it is our duty to pursue it.”

Ayrton Senna

A pandemic of unprecedented proportion hit the world at the late stage of the economic cycle. The resulting “pandemic-induced recession” has impacted all industries at various levels, with banks among the highly impacted. The “big four” US banks alone reported $24 billion in loan loss provisions during the first quarter of 2020. With 30 million new unemployment applications during the first six weeks of shutdowns, and with credit delinquencies on a steep rise, banks are bracing for conditions to worsen.


Bank executives will have to make tough decisions under extreme pressure, not unlike Formula 1 drivers, who make split-second decisions in the 120°F heat of a cockpit, and with their hearts beating over 160bpm. Executives will need to channel the ‘calm yet agile’ demeaner of an F1 driver. Here are five F1-inspired principles and their interpretations for bank leaders.


1. Work with a Talented Crew

Interpretation: Empower executives and external partners to quickly fill-in capability gaps.

  • Create an internal task force that has the power to take action while avoiding the layers of bureaucracy. This task force should include leaders from key business units and support functions, who will tackle the top pandemic-related and urgent challenges such as enabling a Payment Protection Plan or defining mortgage-payment relief plans.
  • Partner with a small set of firms that can have a rapid impact in bridging critical capability gaps in people or technology that would otherwise take longer to develop organically.


2. Study the Track and its Uncertainties

Interpretation: Evaluate probable paths ahead and study the impact of potential actions.

  • Formulate a scenario-based strategy that can help envision different ways the pandemic and its potential impact on the economy could play out. Banks will need to fight the urge to start with the most drastic action. Monitoring progression and refreshing the strategy periodically will help protect the bank’s investments and total shareholder return.
  • Get fresh insights into customer expectations, as their financial needs and consumption of banking services have changed significantly since the pandemic began. Even laggards have been forced into using digital channels, and some may never go back to brick-and-mortar locations. Banks that offer simple and intuitive self-service channels will win in both customer loyalty and efficiency.


3. Fasten Your Seatbelt

Interpretation: There will be events out of the bank’s control; make sure it’s prepared.

  • Leverage advanced technologies to ensure business continuity over extended periods of time. Banks could start with identifying areas where cloud migration, digital workflows (e.g., Appian), remote productivity tools (e.g., Teams) and Artificial Intelligence / Machine Learning (AI/ML) solutions can help prevent disruption to their core operations.
  • Digitize and streamline credit collections to make better, data-driven decisions and handle the mounting volume. As too many households are impacted financially, it is paramount for banks to accurately identify customers who will self-cure, who are temporarily insolvent, and who will not be curable – therefore making a fast contact critical. Machine learning can be utilized to improve effectiveness and to test and identify treatments that work best in the current reality.
  • Keep a tight grip on cybersecurity, as rising digital transactions may lead to an increase in cyberattacks. Banks will need to rapidly advance their cyber resilience and consider bringing the CRO organization to join the CIO in managing cyber risk (if that alignment is not already in place).


4. Hit the Brakes to Stay on Course

Interpretation: Carefully select areas where funds could be redirected to more vital operations.

  • Optimize the branch and ATM network, taking into consideration that the imposed migration to digital channels may permanently impact the demand for branches. Banks can plan for data-driven adjustments in their physical network by evaluating the employment outlook (e.g., a factory closing in the area), balance trends of branch customers, branch performance, proximity to a sister branch, and even game-theory aspects (e.g., strength of the nearest competitor, or maintaining a prime location that otherwise a competitor may take).
  • Handle downsizing carefully, which is always a sensitive subject, both emotionally and financially. The first step should be strategically prioritizing areas for downsizing, as keeping talent in certain domains may be worth the short-term financial impact. Banks should then contemplate alternatives such as pay cuts, reduced hours, leaves of absence, hiring freezes, and optional exit packages. As a last resort, leaders may need to downsize, which should be executed in waves, while closely monitoring the economic progression.


5. Accelerate to Stay in the Lead

Interpretation: Make calculated investment choices; do not fall in line with others who may make rash cuts on spending.

  • Boost selected digitization efforts. Digital transformation has never been more critical. While many banks have digitized their most common (“vanilla”) processes, any deviation from them requires person-to-person customer interaction or manual work and handoffs. Banks should not stop, but rather accelerate efforts to improve the digital channel experience, to automate and digitize back-end processes, and to implement AI/ML to sharpen their decision-making. On the other hand, initiatives that may cause any disruption to digital sales and service may need to be rescheduled.
  • Consider FinTech partnerships and acquisitions as an option to quickly expand digital capabilities. Although the pandemic-induced recession will disrupt many industries, it will also unveil win-win opportunities for banks and FinTechs to partner or merge. While the FinTech would be getting a lifeline through difficult times and access to the bank’s customer base, the bank would be quickly bringing new offers to the market.


It will be challenging and exhausting, but there is a finish line to this race. Bank executives who adopt these five principles will be in better shape to navigate their banks safely across the line.

Corey User

Corey User

Managing Partner, Digital Consulting


Corey is a seasoned strategy and management consultant and a thought leader in the Financial Services industry, specializing in digital strategy and transformation. He has advised most leading US banks on corporate and business strategy. Corey is a Managing Partner in Wipro Digital Consulting’s New York office.

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