In the Midst of a Pandemic, Wall Street’s Preparedness and Adaptability Pay Off

This was contributed by Neil Fishler, Vice President Sales, Strategic Accounts, NA, IPC

At a time when many sectors have been decimated by the Covid-19 pandemic, Wall Street has proved impressively resilient. Without a doubt, first-quarter bank earnings were affected by the virus, but a number of segments performed well. Part of the success can be attributed to the flexible approaches U.S. financial firms have taken and their readiness for “Black Swan” events.

One of the first things many companies did was become strategic about where to devote resource and technological solutions. Identifying the key parts of the business that needed to perform well was crucial, so that those operations could get the attention and technology they required.

For instance, customers of banks and brokerages everywhere have needed to do more financial hedging, which in turn has meant that derivatives have been one of the highlights for banks in the latest earnings results. For this to occur, trading firms have had to rely on cutting-edge technology and connectivity. The BCP planning that Wall Street has done clearly has paid off.

Strategic decisions

Among the new acronyms that are becoming commonplace these days is WFH: Work from Home. The first step for many companies, then, has been to determine what operations needed on-premise attention and where staff could be deployed from home.

For mission-critical operations that demanded all of the compute power and connectivity of a facility, some staff could continue to operate on-site in alternative locations. Various facilities which had been previously unused have been reopened, or are being made ready to be reopened, in order to allow some traders to work on site while still taking all of the safety precautions that are being recommended.

On the WFH side, firms could then determine which traders fell into the higher-performance areas and needed hard turrets and which could continue to work with soft turrets.

Many companies have found that they have been able to develop strong operational procedures by working with partners. At IPC, for example, our focus on customer relationships and access to client environments has allowed us to work closely with a large number of financial firms to ensure they had the capabilities and performance they needed. The virus may have slowed whole economies to a crawl, but markets are still open 24-7 and trading firms have to be able to service those markets.

The next phase

As society adapts to the pandemic, the next phase will involve slowly beginning to work more from on-site facilities. This will involve just as much planning as the initial phase of adaptation, if not more.

Companies will be instituting social distancing protocols for their trading floors, along with various policies, physical barriers and other measures to reduce floor density. Restrictions will be needed on travel between floors and between facilities. There may also be more focus on rotating work between WFH and on-site premises. All of this will involve a technological dimension.

The fast spread of the pandemic required immediate action and in that sense Wall Street demonstrated, once again, its ability to adapt with lightning speed. But emergency measures are no substitute for long-term WFH planning. As we move into this next phase, we expect to see key partnerships play an even bigger role in the success of the U.S. financial sector.

The views represented in this commentary are those of its author and do not reflect the opinion of Traders Magazine, Markets Media Group or its staff. Traders Magazine welcomes reader feedback on this column and on all issues relevant to the institutional trading community.