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SMEs increasing digital investment during pandemic

  • 63% of SMEs have shifted more of their trading and operations online
  • 60% have increased their investment in digital infrastructure
  • Businesses split between investing in hardware or software

The UK’s SMEs – including those in non-consumer-facing sectors – are, through necessity brought on by the pandemic, increasingly moving operations online, according to Close Brothers Asset Finance’s latest research*.  

The survey of 900 SMEs – conducted during the second lockdown - reveals businesses are becoming more online based, with 28.3% moving day-to-day operations online, while 26% have seen an increase in online trading, and 9.1% a blend of the two. The remaining 36.6% have made no changes. For a sector breakdown, see Table 1.

Digital infrastructure

With the move to online has come an increase in capital investment in firms’ digital infrastructure, with 60% of businesses making the commitment to spend more on this key activity.

“We already live in a highly digitised world but it appears the pandemic has super-charged firms’ digital investment plans,” said Neil Davies, CEO, Close Brothers Asset Finance and Leasing. “From our own experience, we started our own digital transformation prior to the pandemic; this allowed us to quickly adapt to the ‘new normal’ while continuing to provide a seamless service for our customers.

“Had we not done this our customer service would undoubtedly have been impacted. From a commercial point of view, it was absolutely the right thing for us to do, despite the upfront – and ongoing – costs.”

Hardware and software

Businesses have been split between investing in hardware or software, when asked which was a priority:

  • Hardware: 39%
  • Software: 39%
  • Both: 22%

Online payments

Cash is continuing to play less of a role as way to make payments as online card payments – by a considerable margin – have become the most popular way to take payment during the pandemic, well ahead of both cash and chip & pin payments; see table 2.

Tables

Table 1: Has your business become more online-based as a result of COVID-19?

Table 2: How has your business mainly been taking payments during the COVID-19 pandemic?

Methodology

*All figures, unless otherwise stated, are from a Kantar survey conducted in late November 2020. The survey canvassed the opinion of over 900 SME owners across the UK and Ireland and across several industries on a range of issues affecting their businesses.