Financial Services Businesses Remain on Track Despite the Pandemic
- Covid-19 , Infrastructure
- 16.12.2020 05:29 pm
The majority (74%) of mid-market financial services companies have remained resilient in the face of the economic disruption that’s taken place this year, according to the Growth Index released today by mid-market private equity firm ECI Partners. 62% of mid-market financial services companies still expected growth throughout 2020 even after the pandemic had begun in March (a fall from 84% pre-March 2020).
Paul McCreadie, Partner at ECI Partners said:
“Financial services firms in the mid-market have proven resilient in the face of the crisis and are rightly feeling relatively confident about their growth prospects. This year has stress-tested financial services companies’ business models in terms of resilience, as companies were hit with the impact of Covid-19, lockdowns and restrictions. We will need our high growth businesses to help us find the path to recovery after the economic hibernation of 2020. The fact that so many financial services firms are feeling confident about their growth prospects is great news for the UK’s all-important mid-market.”
Other key findings of the Growth Index include:
- Financial services firms are the biggest adopters of AI and machine learning, with 45% investing in this form of technology in the last 12 months
- 48% of financial services businesses expect to increase flexibility of working from home but only 18% expect to move or downsize their premises as a result of the crisis
- Of those who are expecting growth overseas, 70% of mid-market financial services firms expect growth to come from continental Europe
- Just 24% cited Brexit as a short term concern (compared to changing pandemic guidance at 42%, global economic downturn 31% and rise in borrowing costs 27%).
Paul McCreadie continues:
“The financial services sector has traditionally been slow to adopt digital transformation. Issues with legacy systems, coupled with large amounts of data and a reluctance to undertake potentially risky change processes, have meant many firms are behind the curve when it comes to technology adoption. It’s therefore promising to see that so much has changed over the last year, with the sector now more likely to have invested in AI and machine learning than any other sectors in the last year. To maintain growth and resilience, it’s imperative that financial services firms continue to invest in these areas and look to remain on the front foot of digital change, whilst ensuring that they continue to put their customers first. Those that do will continue to weather the storm well, and fare best in the year ahead.