Businesses across the globe have taken a hard hit due to the pandemic and numerous countries are now experiencing a recession. We take a look at the demand for service within the financial sector and the differences between the two nations during this economic downturn.
Data was collected from TrustPilot for the months in 2020 since Covid-19 was declared a global pandemic, Awaken then compared this with the same months in 2019 to assess how much growth there has been in demand.
Overall, there has been an increase of 47% for financial services in the USA and a staggering 175% in the UK. Financial worries have been one of the biggest concerns for businesses and individuals during this time and this has seen a surge in customers requiring assistance from financial providers.
The sector has had to quickly adapt to this rise, as highstreet branches have been forced to close and face-to-face services have been almost completely eradicated, providers have had to utilise everything available to ease pressure on service staff.
For those providers who have not already taken advantage of smart technology and implemented self-service apps and websites, call centres are witnessing one of the busiest periods in the last decade.
As call agents work from home while still having to comply with security rules and regulations, even the amplest staff supply could see a strained service being provided to customers.
This is one of the reasons why the financial sector has been hastily seeking new software and tools to ease the stress of agents, while still ensuring the best service possible is provided to customers, especially during such an anxious time.
We take a look at the individual sectors of the financial industry and their trends over recent months.
The Insurance Sector
The insurance world is typically prepared to deal with events such as the pandemic as they know they are in demand during disasters.
The UK saw an increase in demand of 311% during coronavirus compared to the same time last year, while the USA saw an increase of 26%.
Increasing numbers of customers have had to seek advice on cancelling travel insurance as rising numbers of holidays have been cancelled.
The UK has also seen a boost in individuals paying for private health care, to ensure they and their families can receive the best care for any conditions while waiting times increase on the NHS as procedures are postponed.
However, the majority of US citizens who can afford private health care already have this in place or have plans with their employers. There has been a small rise in those purchasing short-term health care plans, but those who are unable to afford health insurance and unlikely to have been able to make this purchase during the current economic situation.
Business customers in both nations have been pursuing their insurers to ascertain if their current policies cover them for pandemics and if they are able to recover any lost finances.
Real Estate Services
At the beginning of lockdown, the UK placed a total ban on completions of property purchases and estate agents were unable to provide viewings.
However, this ban was lifted at the beginning of June and a backlog of eager property buyers boosted the sector to see an increase of 87% compared to last year. The UK government also declared massive reduction on stamp duty to kick start the sector and has seen buyers and vendors push to complete before this benefit is removed in 2021.
The USA has seen an increase of 3%, the real estate sector did not come to a complete halt, unlike the UK, meaning the public was still able to proceed with purchases and sales.
However, the USA has seen a shockingly low number of new properties on the market, as many homeowners are not wanting to take such a large risk of moving, in case they are left with two properties to pay for, despite mortgage rates decreasing.
Investment & Wealth Services
Even with the housing market closed, mortgage applications have increased ahead of budget in the UK and this sector has seen a rise of 119%.
Many home buyers sought to secure a mortgage offer in principle before an economic downturn could see the worst rate or smaller loan offered instead.
The USA has seen a small 30% increase, these services typically require human input and without the proper online and phone assistance available to customers, many are reluctant to try to comprehend services on their own.
However, most mortgage providers and brokers in the UK already had some form of virtual assistance available.
Accounting & Tax Services
This is the only sector in which the USA surpassed the UK for demand during Covid-19 at an increase of 517% to 372%.
HMRC and the IRS have implemented new rules and regulations to allow extended deferral periods for payments and waiving late fees to allow companies and individuals who may be struggling to stay afloat.
However, without expert knowledge of these new benefits, businesses could see themselves getting into a worse situation and being fined for not filing these applications correctly or making a wrong form of payment.
This is most likely why accounting and tax services have witnessed the biggest increase within the financial sector.
Banking & Money Services
It is widely recognised that many individuals and businesses are struggling financially at this time, whether that be due to furlough, job loss of dwindling clients and sales.
In the UK, banks have altered servicers to relieve this strain on their customers by providing larger, cheaper overdraft services, smaller rates on personal loans and even mortgage and loan repayment holidays.
These services need to be applied for and are not always automatically applied to an account, which has led to demands for services rise by 204%. Many of these businesses have launched apps specifically tailored to the current situation to ease pressure on service staff and help customers make easy decisions.
The USA has seen a rise of 148% for banking and money services as customers are also trying to find ways to save as much money as possible. However, these payment holidays are not as common in the states and the main rise for services has been those looking to borrow money for essential costs or remortgage to free some equity.
As these service demands increase, the sector is seeing now more than ever the importance of call agents and online assistants. Without the proper implementation and planning, this stressful time will see customers not hesitate to choose another provider should they be disgruntled by the service they are being provided.