A new report from TheCityUK reveals the speed with which digital technology is transforming the financial and related professional services industry, improving efficiency, innovation and increasing access to services for customers.
‘Key Facts about UK-based financial and related professional services 2018’ shows that the use of contactless payments increased 115% year-on-year in June 2017, reaching 470m transactions in that month. In contrast, the value of cheque payments has fallen by 69% over the last decade and now makes up just 0.4% of all payments.
Online banking use has more than doubled, from 30% of customers to 63% in the decade to 2017. In the five years from 2012 to 2017, the use of banking apps in the UK to access current accounts increased nearly threefold from 21% to 61%. In total, banking app log-ins reached 159 per second in 2016, with a total of 19.6 million UK users.
Digitisation in the insurance industry is also improving communication with customers, with automation enabling claim costs to be reduced by as much as 30%.
Similarly, legal services are making greater use of artificial intelligence, which offers the potential to lower costs in the medium to long term. The internet is also enabling the provision of very basic legal services at low cost, making them accessible to people previously unable to afford them.
Anjalika Bardalai, Chief Economist & Head of Research, TheCityUK, said,
In recent years, firms have made multi-billion pound investments to enable their customers to take advantage of new digital innovations. These innovations are transforming the way the industry works and how customers access the vital services which help them to plan and live their lives. Whether it’s buying a home, accessing legal advice, starting a small business or even paying for a coffee, people’s everyday experience of these services is unrecognisable from just ten years ago.
TheCityUK’s report also underlines the significant contribution the financial and related professional services industry makes to the wider UK economy.
The industry provides employment for 2.3 million people right across the country – one in every 14 UK jobs – with two thirds of them outside London in centres such as Birmingham, Bristol, Edinburgh, Glasgow, Leeds and Manchester.
It contributes £11 of every £100 of UK economic output (a total of £176bn), and £14 out of every £100 of UK tax revenue raised. In total, UK financial services contributed £72.1bn of tax in 2016/17, equivalent to half the total health budget. UK-based legal and accounting services contributed £15.5bn in tax in 2015/16.
Anjalika Bardalai concluded,
This industry is a fundamental part of local economies across the country. It is a major employer, providing high value jobs in all regions and nations of the UK. It’s Britain’s biggest net exporting industry and its largest contributor of tax, helping to pay for vital public services like the NHS, schools or the armed services. Ensuring its ongoing growth and success will be critical to the future success and prosperity of the UK as it leaves the EU in 2019.