CVII scale
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Financial Services Sector

A bellweather group expecting digital transformation.

The group of respondents selected for their use of banking, insurance and savings services is a group that indexes similarly to the UK adult population, though slightly more affluent. So measuring against the norm there are typically only marginal differences - though we did see a significant difference in expectation of digitisation of services.

Of the results where there were interesting differences, those working in the Financial Services sector were slightly more downbeat than other sectors, marking themselves 3% more in the Catastrophic Change category than average (38% compared to 35% overall). Whilst the downturn has been triggered by a health crisis and not directly by the financial sector (unlike 1991 and 2008), clearly the economic impact of lockdown is a major financial one, so perhaps the surprising thing is that the FS respondents are not more in the Catastrophic Change category.

However, the respondents are more polarised about the medium term outlook for their own personal prospects. Whilst there is 7% growth in those feeling Optimistic about themselves after 3 months (39%, up from 32%), there is also a 5% increase in those in catastrophic change over the same period (26%, up from 21%). This balances back out somewhat after 6 months (with 34% optimistic and just 20% catastrophic), but this does suggest that those in Financial Services are noticeably more likely to be either strongly upbeat about their situation, or very negative than those in other sectors.

Despite this, the FS respondents generally get more positive about the prospects for their service providers over time. Whilst 64% currently believe their providers are in catastrophic change right now, this falls to just 49% after 6 months. However, this is still more negative than other sectors’ attitudes towards organisations, who believe 41% will be in catastrophic change after 6 months.

One clear divergence from the norm for this group and that is to do with where financial services users are looking for support to lessen COVID-19 impact. 65% of the Financial Services respondent group said digitisation of services would be very or extremely helpful, compared to 47% for all other sectors.

These scores fell slightly over time, but remained proportionately similar when respondents thought about the support they would like in six months’ time (59% vs 44%). It is feasible that this opinion was already in existence pre COVID-19, and the pandemic has underlined the expectation that services that form part of day to day life should be easy to use and accessible. It is likely that the emergence of the new transforming financial services player such as Monzo and Starling and Tide in the UK are gradually creating a momentum that needs the major insurers, bankers and lenders to follow. It may be that Financial Services, as a regulated industry, has had to innovate at perhaps a slower pace than other sectors, but now such innovations are essential in the lockdown environment.

There seems to be a clear requirement for many players in the Financial Services sector to transform their digital journey. But COVID-19, like in so many areas, has accentuated the leaders in this space, and, overall, the results of the survey indicate that the Financial Services needs more help than others; with continued or intermittent disruption still likely for some time, the next 6-12 months is a clear period for FS to progress digital innovation and transformation.