Financial institution’s optimism falters as Covid continues
28 September 2020
Financial institutions are feeling less optimistic about their ability to grow their revenue over the next 12 months as a result of the Covid-19 disruption.
A new report from Lloyds Bank revealed six in 10 (62%) senior leaders expect to maintain or increase their revenues over the next year, down from 80% in 2019. Two thirds (64%) said they plan to maintain current staffing levels or create jobs, significantly below the 90% who reported the same a year earlier.
It comes as two thirds (68%) of respondents said they anticipate UK economic growth to slow in the year ahead, compared to 58% in 2019 and just 29% in 2018, driven by uncertainty around the Covid-19 pandemic.
Adrian Walkling, head of financial services, Lloyds Bank Commercial Banking, says: “A drop in confidence in the sector’s growth prospects compared to last year reflects how financial institutions are feeling in the midst of unprecedented disruption caused by Covid-19.
“Firms have spent the past decade de-risking and modifying their business models with the aim of increasing their resilience. The next 12 months will be critical as we see how effective those defences are for financial services and the wider UK economy.”
The findings from the fifth annual Financial Institutions Sentiment Survey also revealed a growing trend towards homeworking as a result of recent events.
Almost all (89%) financial institutions will embrace flexible working patterns as a permanent feature, with eight in 10 (81%) expecting to use digital platforms like Microsoft Teams and Zoom to liaise with clients. Two thirds (68%) will use new technology to automate more work.
Walkling adds: “Our findings show that Covid-19 is accelerating the use of technology to help firms adapt to new working patterns. Financial institutions are working hard to find ways to give their employees the flexibility and freedom to choose how they interact with each other and their clients and adapt to these new ways of working.
“For all the challenges we have faced through the pandemic, one of the most positive steps taken by financial institutions has been the rapid roll out of technology for staff across the sector and the commitment to experiment with new ways of working.”
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