The effect of COVID-19 pandemic has affected companies and individuals in many ways, placing a great strain on the economy. With that in mind, Awaken Intelligence conducted research to investigate the impact that the pandemic has had on the financial sector services across both the UK and the US.
As part of the research, the data collated from Trust Pilot was reviewed and cross-referenced with financial demands from the first 6 months of 2019 and compared with the same range in 2020, and the full results of that can research can be seen at www.awaken.io/blog/boom-or-bust.
Categories in the study range from Banking & Money, Investment & Wealth, Real Estate, Insurance, Credit & Debit Services, and Accounting & Tax. The result of the study showed that a rise in demand for financial services occurred. There exists a very wide gap between that of the US and the UK. There was a 47% increase in demand for financial services in 2020 compared to 2019 in the US, whereas, the UK experienced a 175% increase in that same period.
The rest of this article below discusses the results of the investigation.
Impact on Real Estate
Despite the pause in the sector, a wholesome number of people were eager and ready for when it opened again in June. Also, a conveyance process was supposed to be held in March but due to the lockdown, it couldn’t and it couldn’t be viewed from home too. The UK still had an increase of 87% in this sector.
The removal of stamp duty until 2021 spring also has a significant meaning for this sector as a big boom will be experienced. In the US, most landowners found it risky to put their homes for rent in such economic confusion hence only a 3% growth was experienced in their own sector.
Impact on Tax & Accounting
Tax and accounting definitely had a boom in both countries. The IRS and HMRC waived fees for penalty and extended time for payment due to the COVID-19 pandemic. Businesses were excited at the prospect but still didn’t know what it meant for them exactly.
This led them to move to experts in tax and accounting firms who knew the ins and outs of the sector. These firms helped them in no small way and provided an understanding of what all the technicalities meant for their small businesses. This provided the UK with an increase of 372% in this sector while the US had a mind-blowing 517% increase in the same sector.
Impact on Credit & Debt Services
In the UK, a rise of 52% was experienced in this sector while the US had a 16% reduction. This sector seems to be getting ready for more finance struggling as the pandemic is still in place and most people will lose their jobs and have to struggle as a result.
Also, in the UK and US, an increase of 119% and 30% respectively were experienced in the investment sector.
Impact on Banking & Money
Banks in the UK and businesses engaged in giving out loans ensured to provide relief in the form of mortgages, cancelling certain payments, as well as providing credit card payment holidays.
To coincide with the pandemic and the closure of branches or their reduction in opening hours, many companies also heavily promoted their mobile apps and online banking features to actively encourage people to do their banking online at home rather than unnecessarily visit the branch unless absolutely essential.
Impact on Insurance
In the UK, not many people have their health insurance in place and this was duly observed during the pandemic. The NHS (National Health Service) has been in charge of providing free medical health care for many and other people suffering from other ailments had to be put on a waiting list. More credence was thus placed on those entering as COVID-19 patients.
The situation brought about a change as citizens had to seek health care from the private sector to reduce the challenges faced by the NHS and still get the best health care possible. This resulted in a 311% rise in the health insurance sector for the UK. The US only had 26% as most of them were already on health insurance schemes.
The travel insurance sector also had a field day as they experienced their busiest period during the pandemic.
The future impact of the increase in demand for financial services in general
With the increase, according to The Annual Review, financial services had to do a lot of adaptation. It was no longer possible for people to see each other on a face-to-face basis and most financial operations were set on this method.
Now the financial sector has to ensure that all loose ends are tied in respect to technology. They can employ the use of voice analytics as well as use excellent technology for a call centre in improving their customer relationship.
