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ISCOVER
Since the COVID-19 pandemic started early last year, there have been significant shifts in the way we live and work. Many businesses have been forced to dramatically change operations and adopt new working strategies. Sadly, the human cost has been high in terms of health outcomes, lost jobs and family separations.
However, despite its disruption, the pandemic has had some silver linings. There have been rapid medical innovations, increased global collaboration and a greater focus on work/life balance. Here are some other positives that we should embrace and use to help strengthen our businesses, the SME sector and the Australian economy over the longer term.
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Better prepared for future adversity
The arrival of COVID-19 has stress-tested many Australian businesses and forced management to assess all aspects of their operations. In a very short space of time, many SMEs had to optimise their cost base and capital and try to transition fixed costs to variable costs. Many companies with flawed business models failed, while those with strong models and leadership were able to adapt, innovate quickly and survive.
Different businesses overcame challenges in different ways. Many restaurants started home delivery. Sydney-based gin distillery Archie Rose used its capabilities to produce hand sanitiser, while gyms such as Virgin Active successfully moved to online workouts, which helped spark a boom in sports equipment sales. Other businesses, including several of our clients, have used the pandemic to take more control over their supply chains by manufacturing goods onshore.
As a result, many SMEs are now more prepared for future disruption, more resilient than they were before and are in a better position to navigate an uneven economic recovery. Supporting them is Treasury modelling that shows Australian households have accumulated more than $100 billion in savings through the crisis, which will help underpin the recovery as support measures like JobKeeper expire in March.
A new era of digital innovation
As millions of Australians were required to work from home, there was a surge in the adoption of new technology to enhance workflows. Nine in 10 Australian firms adopted new technologies to improve their business continuity.
On average, businesses increased their adoption of new technologies in the first months of the pandemic by as much as in the previous 10 years, according to AlphaBeta, a part of Accenture.
McKinsey estimated the world vaulted five years forward in consumer and business digital adoption in the space of around eight weeks.
Bricks-and-mortar retailers moved towards online ordering and delivery, schools around the world have pioneered digital access to education, and GPs and specialists have begun treating patients remotely using telecommunications services.
The pandemic has also helped us become a more connected community. Being required to stay at home forced many people to go online for the first time. Research has shown 75 per cent of them indicate that they will continue to use online channels when things return to ‘normal’.
Enhanced online opportunities for brokers and lenders
As consumers and more businesses have moved online, so too have many lenders and brokers servicing SMEs who have launched new digital ways to connect with customers. This has given them access to large pools of new customers, and in return has given customers much greater online choice and convenience.
The power of a strong and comprehensive web presence became clear to Grow Finance last year, with many SMEs revisiting their approach to loans and debt during the COVID-19 crisis, especially as interest rates started falling.
With cost and other pressures, SMEs were actively looking to refinance to obtain better funding solutions and almost all of their ‘shopping’ was online. Over the year, our total online-driven settlements increased four times.
With almost all the lending and broking sector online, brokers can quickly update their database of who is lending and what their parameters are. Likewise, lenders can more easily review how competitors are presenting themselves as we emerge from COVID-19 restrictions.
While lenders and brokers will need to spend more on their digital presence, digital marketing agencies are working harder than ever to get work in the post-lockdown economy. This provides lenders and brokers with an opportunity to get ‘more bang for their buck’.
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