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Deloitte continues to support of The Fraser of Allander Institute’s Economic Commentary and, in these very challenging times, I hope you find its insights on the Scottish economy informative and useful.
Last month, I also took part in a podcast with some of the Fraser team, where we discussed in more detail some of the themes from the latest Commentary - you can listen to this here.
This quarter’s Commentary only emphasises that COVID-19 has been one of the most disruptive events that modern society and businesses have experienced.
Regrettably, the increase in cases in recent weeks shows the virus is still at large and, with new restrictions in place, the country could now find itself taking a step backwards on the route to immediate economic recovery.
When the pandemic struck it challenged everyone on a global scale like never before. For many businesses it highlighted strengths and exposed vulnerabilities. However, while a number of businesses have unfortunately struggled to survive the past six months, many have demonstrated resilience - moving through crisis response and making tactical decisions to secure operations as much as possible.
As uncertainty prevails, relying on progress to date is not enough, businesses now have to consider what further changes need to be made to continue to operate effectively. As organisations strive to do this they must become even more resilient.
Our latest thinking in this area, Resilience Reimagined, asks businesses to focus on what being resilient means to them and in doing so consider 3 key pillars - financial resilience, operational resilience, and reputational resilience. This is because when a shock or disruption happens, it will typically affect one of these pillars first, but their combined strength will ultimately help them thrive.
The coming months will bring a further range of challenges and it is important that leaders are building resilience and agility into all parts of their business to enable them to react at pace.
A more resilient organisation will also be vital to tackle the uncertainty of Brexit, alongside the COVID-19 crisis. With just three months until the end of the transition period, and an ever increasing risk of no-deal in the UK/EU negotiations, businesses must get prepared.
The task of rebuilding the economy is a long-term one, but by asking questions now and understanding areas within their control, businesses can lay the groundwork for recovery in the future, ensuring a stronger position when the pandemic passes.
This is, of course, not without its challenges – there are still questions about what a recovery looks like within the context of rising unemployment, health and safety concerns, social distancing, and no end in sight until a vaccine is widely available. However, if organisations take the time to focus on their resilience, there is a valuable opportunity to reimagine the Scottish economy, regenerate future prosperity and re-charge an uplift in productivity and innovation.
Stephen’s experience over the past 30 years has always been exclusively with retail financial services clients. Stephen is a member of the Board of Deloitte NSE, Chair of the UK Oversight Board and is the Chairman of Deloitte NSE's own Audit & Risk Committee. Previously Stephen worked on secondment for the EBRD in Eastern Europe, and spent 6 years in South Africa where he worked with local financial institutions. His present external audit clients include a number of regulated banks and other retail financial services businesses; including a number with an international presence. He also leads a number of propositions in the Challenger bank space, and leads a number of assurance and advisory projects in this space; including internal audit arrangements, regulatory advisory work, and work on assessing corporate governance and risk management frameworks. Recent other projects in which Stephen has been involved include: leading a HM Treasury CCA investigation resultant from a significant redress programme, leading the reporting accountant work on the IPO of a now listed bank; leading the due diligence on behalf of a number of investors into a failing Building Society, and Undertaking a number of S166 reviews on behalf of the regulator in relation to corporate governance and risk management at Challenger Banks.