Here's Why Banks May Not Be Able to Pull Off Permanent WFH

As President Joe Biden previews new plans to increase Wall Street oversight, banks and financial institutions have another issue to contend with: how to carry their more flexible WFH policies into an era of more regulation. Many banks—like many corporate tenants more generally—have adopted a wait-and-see approach to office space strategies, and they’ve declined to state whether remote work will be their norm once the pandemic wanes.  And others, like JPMorgan, have taken a stronger, more definitive position on returning to the office—though even if it does, the firm will still likely scale back its real estate footprint, as it undertakes plans to consolidate its Manhattan operations at a new Park Avenue skyscraper and seeks sublettors for 800,000 square feet of space in New York City, according to a report in Bloomberg. 

The wait-and-see game is particularly tough for banks. “The challenges around compliance and security are important factors when it comes to banks’ decisions on where their people can work,” said Giles Wrench, Corporate Solutions at JLL, in a new post on this subject. “This is an industry that is used to having their people in a controlled environment, and for which regulation is a greater factor than for almost any other office intensive user. The reality is there’s a lot of indecision and waiting to see before deciding who can work remotely long term.”

JLL notes that cybersecurity attacks are on the rise as the pandemic wears on, with financial employees at particular risk given the nature of transactional and confidential information they routinely exchange. Employees working remotely are more vulnerable to phishing attacks and other tech breaches as well, and banks’ firewalls are often incompatible with the majority of online sharing platforms.

Increased regulations will likely require workers who need to be monitored for compliance purposes, or those who work with high-risk profile portfolios or deal with highly confidential data to return to a physical office. And finally, financial institutions will have to contend with the fact that a growing share of workers, particularly millennials, have grown quite accustomed to WFH and the pandemic model of “work where you are.” It’s quite possible, the JLL report notes, that some of those workers may opt for similar positions in tech, an industry that’s thrown open the WFH floodgates.

“Oftentimes, the balancing act between compliance and mitigating security risks on the one hand and attracting employees with flexible policies on the other has financial institutions at odds with themselves,” the report notes. “One department may want everyone to work remotely while another may want most people back to reduce risk.”

Survey data from the National Association for Business Economists bolsters that view, indicating some companies may trash their WFH policies altogether in a post-pandemic world. Roughly half (51%) of respondents anticipate their firms will suspend their stay-at-home policies in the second half of 2021.