COVID-19 restrictions inspire adaptation, innovation and a race to digital

In April, Banking Circle held a webinar in which payments experts shared insights and experiences to help businesses navigate the COVID-19 crisis. Following the event, attendees and other industry players were surveyed to reveal the impact they are feeling so far and how their businesses are adapting.

The business impact

82.2% of respondents confirmed that they now have employees working from home, leading to 37% investing in new tech to allow for this shift. However, showing the vastly different experiences so far, 19.2% of businesses have had to place some employees on furlough, and the same proportion have had to reduce salaries for some of their workforce. Just over one in five (22%) have focused on de-risking their portfolio, and 15% have adjusted their business model.

But the picture isn’t just one of retrenchment and cost cutting. For a small proportion (5.5%) there has actually been a need to recruit additional employees. And nearly half (45.2%) of those who responded to the survey reported having launched new or extended solutions to meet new demand.

It is encouraging to see that the number of businesses adapting to the new market far outstrips the number seeking financial assistance through government schemes (13.7%), and that none have had to apply for rent or finance repayment holidays.

While 37% reported reduced demand for their services, a similar proportion (31.5%) have seen demand increase. One in five respondents has experienced an increase in late payments from customers, but only 8% have had difficulties making payments themselves, despite 17.8% experiencing difficulties with their supply chains.

Half (50.7%) of the businesses surveyed have seen increased demand for online services, and 76.7% have amended their sales and marketing model to adapt to an all-digital world.

Supporting businesses

Across the industry, changes have been implemented to help businesses get through the most challenging times in living memory. One such change is the increase in the contactless payment limit, which 65.8% of respondents feel has helped small businesses.

The other main changes respondents recognise as helping businesses and communities include increased flexibility on digital payment methods (75.7%), faster implementation of digital payment tools (46%), and the provision of digital onboarding (43.2%).

The personal impact

Of course, widespread lockdown is not just affecting businesses, but it has a profound impact on the individuals running and working for those businesses.

The most common positive personal effect reported by the respondents was the added connection with family due to working from home (33%), followed by reduced stress from commuting (25%) and the increased free time for exercise and resulting positive effect on wellbeing (15.3%).

Adapting to homeworking has however also been challenging for some, with 32% saying they believe they have worked longer hours and have less time for leisure activities as a consequence of the new work-from-home culture. And nearly 1 in 10 (8.3%) have struggled to manage home schooling or childcare.

Looking ahead

In a rapidly changing and unpredictable landscape, it is difficult to look ahead. However, it is perhaps unsurprising to see that a significant 63.5% expect the pandemic to have a long-term impact on their business. A quarter expect the impact to be mostly positive; 10.8% expect a negative impact; and 63.5% believe the impact of the virus will be positive in some areas and negative in others.

Opinion is mixed on when business life is likely to get ‘back to normal’. One in five (22%) expect normal working life to return with three months, however over a third (35.1%) see this taking between three and six months. And almost the same percentage (31%) do not expect normal service to resume for at least six months, taking us well into Autumn, or even into 2021.

As discussed by the payments experts in the webinar, businesses able to adapt quickly and deliver new or re-purposed solutions under the new restrictions are the ones that will prosper and see those positive effects most clearly. These are undoubtedly difficult times through which people and businesses are living and working, and no doubt the responses to the survey would vary considerably from week to week as the global picture changes. But it is extremely encouraging to see the efficiency and enthusiasm with which businesses of all types and sizes have adapted to meet the latest challenges. They are not sitting back to wait and see what happens, they are investing in innovation, adapting and meeting customer needs. Those businesses able to deliver new solutions to meet the needs of their customers will gain significantly in the long term from providing a positive customer experience during difficult circumstances.

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