The effects of COVID-19 on the Australian business community present both challenge and opportunity. Those businesses and brokers who are able to weather the storm are likely to emerge stronger than ever, writes NAB general manager, commercial broker, Chris Thomas.
The impact of the outbreak of the COVID-19 pandemic on our business community has been swift and severe.
From temporarily closing their doors and letting staff go, to facing supply chain disruptions and reduced demand in a slowing economy, Australian businesses are juggling a number of challenges at this time.
Even before the term “coronavirus” entered our vocabulary, business conditions and confidence levels had been running at slightly below average in recent years.
Recently, the NAB Monthly Business Survey has painted an even more challenging picture. Large reductions in activity caused business confidence in March to fall to its lowest level at -66 index points, compared to +4 in February 2020. While business confidence slightly rebounded in April, it remains around twice as weak as the 1990s recession.
The hardest-hit areas of Australia’s business landscape have been well documented – retail, hospitality, recreation and personal services, mining, finance and property services have all suffered sharp declines. However, there are some pockets of the economy that have been bolstered, including wholesale trade with uplifts attributed to rising activity at our supermarkets, equipment to facilitate increased working-from-home arrangements, and agriculture.
As the crisis continues to unfold, NAB chief economist Alan Oster has revised the outlook around economic growth, with Australia set to have a less sharp contraction than first predicted. However, unemployment, which influences consumer spending and business investment, is still expected to reach double digits.
In a world of uncertainty, we can safely arrive at the conclusion that Australia’s business landscape has changed forever.
While there are, no doubt, many challenges ahead, we believe this difficult period will ultimately be a shining example of the strength of the Australian business community to adapt and survive, and the brokers who service them.
How businesses are adapting
One positive out of this crisis is the examples of rapid-fire thinking and pure ingenuity on display throughout the business community.
Where possible, business owners are findings ways to transform their enterprises and offerings to stay open, keep on employees and serve their communities. They are adapting rapidly – from changing up operating models and identifying new ways of working, to rethinking fixed costs and, of course, the migration to online.
A report into the business impacts of COVID-19 by the ABS found nearly half (47 per cent) of businesses made changes to their workplace arrangements, while two in five have changed how they deliver their products or services, including shifting to online services.
Being able to embrace change and pivot direction to address a problem or need, as so many Australian businesses have done, can be critical to long-term sustainability and success.
The broadening role of the broker in a COVID-19 world
For the 2.1 million SMEs in Australia, there is even greater reliance on their network of supportive allies during this period of unprecedented uncertainty. As part of this, the role of brokers as a trusted adviser has intensified, and so too has the obligation for brokers to be “closer” to their customers than ever before – even in the age of social distancing.
Brokers themselves are also finding innovative ways to service, connect and understand their customers’ businesses and what unique conditions and challenges they are facing. For some SMEs, brokers need to be ready to support what could be a period of accelerated business growth after the storm is weathered.
COVID-19 is seeing brokers connect with customers in greater depth to gain deeper understanding of these challenges and opportunities. Without question, these conversations will uncover needs requiring the guidance and advice of the trusted adviser. The role that brokers play has never been more important. In fact, the biggest success stories in our industry will be those brokers fully entrenched within their customer’s journey and being able to meet a broader range of customer needs across personal and business.
Like their customers, many brokers may find their own business propositions evolving. For instance, brokers are integrating digital tools within their business processes, including electronic interviews, signatures and documentation, to drive more efficient customer service and enable remote working.
Weathering the storm together as an industry
Taking an industry-wide approach is the only way we can counter a crisis of this large and unprecedented nature. It has been great to see how proactive and collaborative lenders, aggregators and industry bodies have been in providing support to struggling businesses. Furthermore, government and regulators have been outstanding in their response.
As Australia’s largest business bank, we too have been hard at work to support SMEs across the country as they face the challenges brought on by the current pandemic. So far, we’ve had over 160,000 COVID-related conversations with our business customers looking for guidance and support.
For brokers, our support is also unwavering. We have 450 broker-aligned business bankers capable and experienced in looking after broker customers and our dedicated BDMs are there to assist our brokers.
We recognise that digital solutions are also going to be a critical component of our support for brokers moving forward and are prioritising digital enhancements to ensure we can service brokers and customers as efficiently as possible.
Like many businesses across Australia, we too are getting on with this new “business as usual” environment. As we navigate this new terrain together, our commitment to being the bank behind brokers, and their customers, is as strong as ever.
We are here to support you and look forward to emerging the other side together, as part of a stronger and more dynamic business community.
Chris Thomas is the general manager, commercial broker at NAB.
Since joining NAB in 1988, Chris has held several front-line senior leadership roles within the bank’s Business and Corporate Banking divisions. His roles have largely focused around delivering positive outcomes for thousands of SME customers.
In 2013, Chris established the Commercial Broker division within NAB’s significantly large business bank. In his current role, he leads a team of highly professional business bankers, working to build strong relationships with the broker market to ultimately help SME Australia grow and prosper.
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