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Majority of UK financial firms optimistic about 'long-term resilience' post-pandemic

·2-min read
City of London skyline
Three quarters (75%) of business leaders in the banking and finance sector had been able to streamline administrative processes by using new tech and 65% had lowered operational costs, according to Yobota. Photo: Getty

The majority of Britain's banking and financial services companies are confident in their ability to withstand future disruptions, following the coronavirus pandemic. 

Financial firms have reaped the benefits of digital adaptation after the COVID crisis forced them to rethink their business models.  

According to a study by Yobota, 76% of businesses spent more money on technology and put tech at the heart of their company's operations during the pandemic, compared to a year ago. 

The London-based technology company also found four in five (79%) financial firms that embraced new technologies during COVID, were able to successfully pivot their services to suit the current climate.

Of the 250 respondents, nearly two-thirds (63%) admitted that, in the past, poor technology inhibited their ability to deliver better products or services to customers. 74% said that investing in digital solutions has helped their business to improve the customer experience in the past year.

Three quarters (75%) of business leaders in the banking and finance sector had been able to streamline administrative processes by using new tech and 65% had lowered operational costs, according to Yobota. 

Read more: UK rebound shaves billions off corporate borrowing bill

Improving customer retention and acquisition strategies was cited as another key outcome by 74% of businesses.

While 76% of those surveyed pointed towards collecting more accurate data from customers as one of their main motivations for improving the technology they were using during the pandemic.

"Today, technology is undoubtedly a differentiator for businesses across the financial services sector, so even once the threat of COVID-19 abates, companies must maintain a keen focus on digital transformation," said Ammar Akhtar, CEO of Yobota

The optimism is not only felt in the financial sector, businesses across the UK are anticipating to borrow less money as the UK economy reopens. 

According to EY's latest ITEM Club Interim Bank Lending Forecast predicts the demand for loans to support cashflow will reduce, as the economy rebounds quicker than anticipated.

UK firms now expect to borrow £19bn ($26.8bn) this year — £7bn less than previously forecast in February.

This is due to a combination of several things including an economic boost from the reopening of non-essential retail, outdoor activities and restaurants as well as easing restrictions further down the line.

In 2020, banks lent businesses £35.5bn in net terms, including COVID-19-related government-backed loans to help them through the crisis. This was a 8% year-on-year increase.

With the economy re-opening, growth in lending volumes is set to halve by the end of 2021 to 4%, and slow further in 2022 to 1.6%, EY said.

Watch: What UK government COVID-19 support is available?

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