How banks might respond to the coming downturn

  • 15 December 2022
  • Blog | Leadership & Strategy | Blog

We are in the midst of a global slowdown. Here, Margaret Doyle, Chief Insights Officer and Partner in Financial Services at Deloitte UK, explores how expectations about financial services in general, and banks in particular, are shifting. 

“I think that we all need to be imaginative in addressing the challenges ahead.” 

Events have long-standing consequences. Arguably, a backlash against globalization and a rise in populism are some of the consequences of the global financial crisis.  

The cost of living crisis that we are facing could also have broader consequences. The thing about this cost-of-living crisis is that it’s affecting millions of people. It’s not just having an impact on people who would might previously have been considered to be at the margins.  

When you have people who are middle class, with jobs, who suddenly can’t afford to heat their homes, feelings of anxiety and disaffection may rise, and a willingness to question and challenge the system in ways that we haven’t seen for many decades.  

People will start to question: ‘what is business going to do to help us?’ This is something for bank boards to think about, in terms of how they are responding, and how they are communicating with customers.  

Some actions – such as support for energy costs – are best taken at government level. Nonetheless, there are all sorts of ways in which banks may use this as an opportunity to reflect, from policies around forbearance to things like the language that’s used when communicating with customers.  

Banks are in a position to anticipate when businesses or individuals might run into trouble. They can reach out to people to offer support and guidance when it’s required. And they can couch their interventions as support through unprecedently hard times, rather than as a sort of wagging of-the finger. Levels of anxiety and even misplaced guilt and failure are likely to be high already. Banks can try to offset rather than exacerbate such feelings.  

All senior business leaders, all bank boards, all leaders in our society, would do well to pause, and ask: ‘What do we do? What can we do as individuals? What can we do collectively? What can we do institutionally to address this crisis?’