The Pacific’s biggest commercial financial institutions have come together to share ways to stay resilient during the COVID-19 crisis.
In a first-of-its-kind virtual meeting hosted by the International Finance Corporation (IFC), senior management from the Pacific’s biggest providers of finance reviewed global best practices, learned from past crises and discussed measures taken by other financial institutions around the globe.
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets, working in more than 100 countries. With funding support from the governments of Australia and New Zealand, IFC works in the Pacific to stimulate private sector investment and reduce poverty in the region.
“With an economic downturn which is expected to leave no Pacific nation unscathed, IFC is also working to help financial institutions in the region continue to back businesses, in particular small and medium sized companies,” Thomas J. Jacobs, IFC’s Country Manager for Australia, New Zealand, Papua New Guinea and the Pacific Islands told banking executives at the virtual meeting. “It’s important to keep them operating, and for that they need finance.”
IFC has held more than 35 virtual meetings for banks and financial institutions across Asia-Pacific, helping to strengthen the important financial sector at a time that economies are under huge pressure. “A pandemic of this scale and nature is giving rise to unique challenges and it is evident that there is a shift in the focus of operational risk management,” said Anuradha Sridhar, IFC’s Financial Institutions Group Advisory Regional Risk Specialist for South Asia.
There is a need, more than ever, to address emerging risks and rethink our priorities.” The webinar was attended by participants from Pacific nations including Papua New Guinea, Fiji, Samoa, Tonga and Vanuatu.
They considered lessons from Asian banks on their COVID-19 responses, including a shift to digital channels, with the pandemic forcing banks to significantly accelerate their digital capacity.
“In the Pacific, where countries have challenging geographical terrains and most of the populations live in rural and remote areas where it may not be commercially viable for banks to open branch networks, implementing digital technology is seen as a necessity, as long as regulations allow,” said Kevin Gani, Operations Officer for IFC’s Financial Institutions Group in Asia-Pacific.
A key area covered at the meeting was financial stress testing, which allows banks to assess the impact of the crisis and to devise a plan to ensure resilience and future growth. “Stress testing is as much art as it is science; good judgment is as important as measuring and evaluating data.
It is a critical part of a holistic risk management approach to deliver robust and forward-looking contingency planning, which helps to ensure resilience during times of stress,” said Paula Felipe, IFC’s Financial Institutions Group Asia Pacific Risk Management Advisory Lead.