Boom or Bust: how the financial services sector is coping
by Simon Black, CEO, Awaken Intelligence
Covid-19 has had an impact across all industries and businesses are feeling the sting. However, is it equally devastating within every sector? As industry and individual concerns grow during the inevitable economic crisis, financial services are seeing an increase in demand as everyone attempts to stretch every penny as much as possible.
By collating data from Trust Pilot and cross-referencing the demands for these services in the first half of 2019 compared to the same period in 2020, we take a look at how the financial sector is coping during the pandemic in both the UK and the USA. Both in the UK and across the Atlantic, there has been a significant increase in demand for these services. The UK saw a 175% rise, while the USA has seen a 47% rise.
The greatest increase has been seen within accounting and tax services, up 372% in the UK and 517% in the USA. Presumably due to companies seeking ways to extend and defer payments with HMRC and the IRS, while ensuring penalty fees are avoided. This was the only industry that gained more demand in the USA than in the UK.
While all financial industries saw an increase, the most significant difference between the two countries was the demand for real estate. The market in the UK has begun to reopen and a backlog of eager buyers and sellers are pushing the conveyancing process with an 87% increase on last year.
The USA is still struggling to control the virus, which has led to homeowners pausing their sales and buyers holding off on their search until both the economy and health return to normal, which has led to a meagre 3% increase.
Demand is up across the board, despite the public being unable to visit many of these service providers in person, banks are pushing their technology teams to digitalise their services as quickly and efficiently as possible to ensure they are available remotely. In a bid to handle the demand across the board, some businesses have started to use voice analytics software, a powerful piece of AI that helps contact centres increase efficiencies.
Real estate agents are providing digital tours of properties and insurance companies are growing their teams to meet the demand of customer service helplines for both claims and individuals now wanting to ensure they are covered against all eventualities previously not predicted.
Car insurance providers are seeing an increase in demand for their services as the public are seeking ways to reduce payments due to financial hardship. Insurers’ service lines are kept busy and in demand with requests to reassess risk levels as people are driving less and potentially waiving cancellation fees or processing fees for amending policies. This has led to an increase in demand of 311% within the UK for the insurance industry.
Credit and debit services have increased 52% in the UK but demand fell by -16% in the USA. In the UK, a change of circumstances has led to more people having to utilise overdrafts and credit cards to cover essential costs. In the US, unemployment insurance was expanded from three to four months, and temporary unemployment compensation of $600 per week was provided. This led to a drop in demand for Debt Relief Service, Credit Counseling Service and Credit Bureau services.
Customer service centres are also being inundated with requests for loan and mortgage payment holidays until their financial status changes. However, the USA has been providing citizens with Economic Impact Payments, which could be a contributing factor as to why less Americans are using credit services.
Investment and wealth services have seen just a 30% increase in the USA, compared to 119% in the UK as mortgage applications rise and businesses and individuals look for ways to secure their funds ahead of an economic downturn.
Despite apps and online assistance available to those who are looking for these services, these transactions are favoured with expert human input. With most of these businesses still closed for the protection of staff in the USA, this form of service has proven hard to keep up with resulting in a slight drop in 2020.
This sector is now witnessing the importance of having systems in place to allow clients to seek the advice they require remotely. Had this been implemented beforehand, we may have witnessed a similar rise to the UK who has begun to reopen.
Overall, the financial services sector has experienced lots of activity with consumers and businesses demanding seismic shifts in their financial support requirements, both in terms of products and services. Such demand is likely to grow as non-contact transactions and online activity become the norm.