Evli has done an unprecedented exercise, with the introduction of a continuity plan, employees working remotely and new ways to stay in touch with clients. However, and despite the market turmoil, we have been able to keep all of our funds open and our operations running, and the staff has performed admirably in a difficult situation.
As in the rest of the world, the situation in the Nordic region is unprecedented and the effects of the coronavirus will be felt for a long time to come. While the impact has not been as heavy here as it has been in southern Europe, there is still uncertainty and debate about the right strategy to fight the virus and how to safely reopen the economies. At Evli, this has meant, among other things, the introduction of a continuity plan, employees working remotely and new ways to stay in touch with clients.
“On Tuesday, February 25, we launched our Business Continuity Plan. This is a statutory continuity plan that every financial institution must prepare in the event of business disruptions. From that day onwards, we began an unprecedented exercise at Evli. We set up a command centre to coordinate the coronavirus processes, developed guidelines to prevent in-house virus infections, directed employees to work remotely, and compiled an information package for clients about Evli’s business continuity. Within a couple of weeks, our entire staff had made the switch to remote working,” says Maunu Lehtimäki, CEO.
All funds remained open despite the market turmoil
Evli's ability to transform into a purely virtual bank and wealth management group shows that the investments we’ve made in the development of our IT systems in recent years have been a great success. From the very beginning, however, what is most important is that the day-to-day operations of the bank have continued to function.
Lehtimäki says he is pleased with the way the bank has navigated through the coronavirus storm thus far. “Despite the market turmoil, we have been able to keep all of Evli's funds open and our operations running. The staff has performed admirably in a difficult situation, focusing on market operations, active communications with clients and handling administrative tasks.”
All measures are based on a carefully thought-out plan, and the aim has always been to ensure the bank's profitability in a challenging environment. “Evli's activities are based on trust, and the key signal for that is the company's results. While we can tolerate loss-making quarters, they are not desirable in terms of maintaining trust. As early as March, we took a number of adjustment measures to lighten our cost structure. As part of the measures, the Board of Directors and the Executive Group, as well as some of the personnel, voluntarily reduced salaries and fees on a temporary basis. At the same time, a large number of the staff agreed to use up their unexpended vacation days and to exchange their holiday pay for extra days off,” says Lehtimäki.
The future operating model will be a hybrid
Evli's new operating models arising out of the crisis clearly differ from the bank's traditional working methods. Lehtimäki points out that these would not even be up for consideration under normal circumstances. “As Evli is a bank, fund management company and asset manager, it is required by law to keep its operations running at all times. That’s why these crisis-induced changes could not even have been experimented with in the past. However, everything has gone better than we could have imagined. There have been no productivity interruptions and the employees have been satisfied. And the teamwork has also continued well.”
So, is it worth it to go back to Evli's previous operating model?
“We won’t go completely back to the way things were. Over this past month, we have been planning how we can apply some aspects of the current approach into the future. Still, we won’t abandon the office either, as it is a key place to meet clients and exchange ideas with colleagues. I foresee Evli's future operating model as being a hybrid which combines remote working and office work.”
Central bank support inflates the stock bubble
Evli estimates that the bank's operating profit for this year will be clearly positive, provided that the market remains at the same level as after the first quarter at the end of March. If, on the other hand, the market conditions would deteriorate further, Evli estimates that the operating profit will be positive.
The markets have clearly recovered since March turned to April - especially in the USA, where the values of many tech stocks are already at a higher level than before the crisis. “However, I fear that this is due to the unprecedented support measures by central banks. The real world is connected to the companies’ results, and I don’t think these will be favourable. Investors should be prepared that, even in the best-case scenario, share prices will move sideways from one quarter to the next, and that they will probably start to slide downwards,” Lehtimäki comments.
The situation in the Nordic countries is relatively good. According to Lehtimäki, this is due to the fact that, on average, Nordic companies are in better shape than European companies. “The Nordic countries have also pursued very sensible policies on viral disease control measures. In Sweden, the policy is different from its neighbouring countries, but even there it enjoys great domestic popularity. It is still too early to assess whether one country has done better than the others. This will only be known when adequate herd immunity has been achieved through vaccine or previous infections.”
Lehtimäki has a confident outlook on Evli's future. Although there is no return to the global situation at the start of the year, and Evli's employees cannot meet their clients in person as often as before, the bank's strategic priorities have not changed. They still consist of increasing international fund sales in the Nordic countries and other European countries, increasing sales of alternative investment products and developing new products, and simply creating a unique customer experience.
