The effects of the coronavirus pandemic look set to change the working landscape for the UK wealth and asset managers as they embrace long-term flexible working arrangements, according to a new report from Lloyds Bank.
Data from the latest Lloyds Bank Financial Institutions Sentiment Survey, which gathers views from major banks, asset and wealth management firms, insurers and intermediaries, showed that 89% of wealth and asset managers planned to maintain flexible working patterns for employees while 85% expected to use digital platforms like Microsoft Teams and Zoom to liaise with clients.
Additionally, 62% said that they will use new technology to automate more work, while 89% of senior leaders in the sector said they planned to maintain current staffing levels or create jobs over the next 12 months, up from 73% a year ago.
The survey also highlighted that many wealth and asset managers expect their business to show resilience despite disruption caused by the pandemic, with 96% saying their Brexit preparations are on track and 63% expecting to maintain or grow revenues in the coming year.
However, expectations were not so positive for the wider UK economy, with 59% of survey respondents saying they expected UK economic growth to slow in the year ahead, up from 41% in 2019, while 41% also expected slower growth in the financial services sector, up from 32% last year.
Despite the resilience of most firms, coronavirus was still cited as one of the top risks to the wealth and asset management industry, with 52% of respondents citing the disease. Financial market risk such as interest rates and currency movements, as well as cybercrime, were cited by the same percentage.
A majority of the respondents, 63%, also said the pandemic will have no impact on their environmental sustainability and sustainable finance strategies, compared to just 17% who said they will focus less on sustainability.
“A drop in confidence in the financial services industry’s growth prospects compared to last year reflects how wealth and asset managers are feeling in the midst of unprecedented disruption caused by [coronavirus]. While it’s encouraging to see that maintaining and growing headcount is on the agenda for more wealth and asset managers this year, economic uncertainty makes the year ahead incredibly hard to predict. Like the rest of the financial services sector, wealth and asset managers have spent the past decade de-risking and modifying their business models with the aim of increasing their resilience. The next 12 months will be critical as we see how effective those defences are”, said Darren Flynn, head of wealth and asset managers at Lloyds Bank Commercial Banking.
“Our findings show that [coronavirus] is accelerating the use of technology to help firms adapt to new working patterns. Wealth and asset managers are working hard to find ways to give their employees the flexibility and freedom to choose how they interact and adapt with each other and their clients adapt to these new ways of working. For the many challenges we have all faced throughout the pandemic, one of the most positive steps taken by wealth and asset managers has been the rapid roll out of technology for staff across the sector and the commitment to experiment with new ways of working”, he added.