80% of FS firms to invest in tech for long-term remote work

More than eight in ten (81 per cent) financial institutions are preparing to invest in new technologies to facilitate working from home over the long term, according to a new report from Lloyds Bank.

Almost all (89 per cent) of the financial institutions surveyed were planning to maintain flexible working patterns for employees after the pandemic has been controlled.

A further 81 per cent expect to continue using digital platforms like Microsoft Teams and Zoom to liaise with clients, while 68 per cent said they will also use new technologies to automate work.

When it came to the broader financial outlook, 62 per cent of senior leaders said they expect to maintain or grow their revenues over the next 12 months, compared to 80 per cent who said the same in 2019.

The findings are from the bank's fifth annual Financial Institutions Sentiment Survey, which gathered views from 107 senior decision-makers at major banks, asset and wealth management firms, insurers and intermediaries.

In addition to COVID-19 disruption, 90 per cent of institutions said their preparations for Brexit are on track, while 64 per cent plan to maintain current staffing levels or create jobs (down from 90 per cent in 2019).

Looking to the broader economic outlook for the UK in the coming year, 68 per cent of respondents expect growth to slow in the year ahead, compared to 58 per cent in 2019 and 29 per cent in 2018.

A similar proportion (62 per cent) expect growth in the UK financial services sector to slow over the same period (55 per cent in 2019 and 27 per cent in 2018).

The pandemic was seen as the top risk to financial institutions, as cited by 62 per cent of business leaders – ahead of economic uncertainty, new regulation and Brexit; which was listed as 2019’s top risk.

Adrian Walkling, head of financial services at Lloyds Bank Commercial Banking, said: “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," he continued, adding: "The next 12 months will be critical as we see how effective those defences are for financial services and the wider UK economy.”

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