Pandemics are scary and the loss of life is a genuine tragedy. On a more positive note, the decisive actions of authorities in the likes of South Korea, Hong Kong and Singapore will hopefully provide a public health management template for Ireland and its European neighbours. Containment is key and discipline critical. Contagion can also be an unexpected risk in finance and is usually caused by rogue activity. Step forward Mohammed Bin Bonesaw. Not content with the murder of a US-based journalist, the Crown Prince of subtle appears to have set his sights on dismembering Texas and North Dakota from the election coffers of the GOP. Currently, markets are experiencing full-blown panic as Saudi and Russian leaders decided at the weekend that a deliberate oil pricing implosion was just what the world needed. Presumably, Agent Orange in the White House might have a different view after a few calls from Wall Street and Houston have set him straight. Good news at the gas pumps maybe, but not so good for oil companies and their creditors, the banks and junk bondholders. Once again the global banking system is about to be challenged. It is not news to readers here that financial services companies are already under pressure. The challenge for them is the adoption of technology to survive competition from nimble new entrants and existing players who execute digital transitions swiftly. Not unlike the Covid-19 crisis, swift decisive action rather than words is required. The good news is that recent headlines would suggest that there has been an acceleration of corporate activity which provides hard evidence of a renewed urgency in financial services. Take your pick from the following.

• Italian Action: It has been many years since Europe witnessed a banking take-over. Cue the giant Intesa Sanpaulo’s €4.9 billion approach for smaller rival UBI Banca. Irrespective of Covid-19 shut-down damage to the Italian economy, the Italian banking system is very fragile. The deal makers might have liked to have known about the government decision to suspend mortgage payments before launching the bid but then there never really is a dull moment in European banking. Ask Deutsche Bank….
• Fintech Action: Not all corporate activity in European financials is the equivalent of two drunks propping each other up at an Italian cocktail bar. Europe has a number of fintech start-up superstars. Karma Credit is one and it’s about to be purchased by the US accounting software giant, Intuit, for a whopping $7.1 billion. Karma began life in 2007 providing credit scores to consumers and now has 100 million users of its expanded services platform.
• Irish Action: The example of an established accounting player like Intuit wanting nimbler fintech expertise is not an isolated one. Closer to home Grant Thornton has selected fintech start-up, Fund Recs, to provide it with innovative software to turbo-charge its investment funds auditing activities.
• Insurance Action: Despite the worst market conditions since 2008 yesterday there was no stopping a huge announcement in the global insurance world. Aon will purchase rival broker, Willis Towers Watson,  for almost $30 billion.

A global crisis like Covid-19 will remain primarily a challenge for humanity with tragic losses. However, it will hopefully run its course like every other pandemic in human history. As financial observers, it will be instructive to see which sectors took decisive strategic action in a period of huge business uncertainty. It is not unreasonable to suggest that the necessity for certain sectors like financial services to act right now tells a bigger story than mere fear. Some business models have no choice; the failure to act will be fatal.   Enjoyed this blog post? Then why not check out our other great content here!