digitalisation
Europe Fintech Ecosystems Insights

In the Face of Economic Adversity, UK Continues to Invest in Financial Digitalisation

The European Investment Bank has revealed that throughout the past year, over half of European firms have taken significant steps towards digitalisation, focusing on enhancing their digital presence.

The latest report Digitalisation in Europe 2022-2023 has revealed that following the pandemic, 53 per cent of companies in Europe have expanded their online services. In the US specifically, this has helped close the technological gap. Sixty-nine per cent of EU firms have implemented advanced digital technologies in 2022, in contrast to 71 per cent in the US.

However, the report also highlights a disparity in digital adoption across the EU. Only 30 per cent of microenterprises prioritise digitalisation. This is compared to 62 per cent of larger firms, underlining the need for inclusive digital strategies to encompass businesses of all sizes.

The European Union’s commitment to digital transformation is evident in its allocation of over €165billion towards the Digital Decade objectives. This investment, particularly through the Recovery and Resilience Facility (RRF), is a testament to the EU’s dedication to supporting digitalisation in both the public sector and businesses. Different levels of digital transformation and funding allocation are observed across EU member states. These have received a significant share of the Digital Decade budget.

UK surge in investment

In 2023, UK businesses are heavily investing in digital transformation, demonstrating resilience and adaptability in the face of economic challenges. According to a report by Boston Consulting Group, as referenced in Consultancy.uk, a significant number of executives from large companies are planning to increase their spending on digital initiatives.

This surge in investment is driven by the need to adapt business models and capitalise on new revenue growth opportunities, even as a global recession looms. Key technologies such as artificial intelligence, blockchain, and the Internet of Things (IoT) are garnering substantial interest, with executives convinced of their crucial role in business success.

However, the path to digital transformation is fraught with challenges for UK companies. A study highlighted in Grand View Research reveals that many large UK businesses are struggling with a shortage of technical skills and the challenge of integrating new technologies with legacy IT systems.

This situation is a significant barrier, potentially delaying the transformation process. Additionally, the healthcare sector in the UK is expected to witness substantial growth in digital transformation. This growth is primarily driven by the need for enhanced quality of care and the ability to respond effectively to changing health scenarios, as indicated by the increased adoption of technologies like electronic health records (EHR) during the COVID-19 pandemic.

Firms need a digital identity

In this digital evolution, digital identity solutions, encompassing identity document verification, electronic IDs, identity proofing or authentication based on biometrics, access to identity data sources, and electronic signatures, among others, play a crucial role when it comes to digitisation. Digital identity technologies not only streamline business processes but also strengthen security, leading to significant time and cost savings.

A very simple and clear example of how digital identity solutions are key for companies of any size and sector to digitise their processes is electronic signatures. Signicat, the pan-European digital identity firm, released a study commissioned from Forrester Consulting on the total economic impact (TEI) of Signicat.

It found that companies saved on costs and processes through the use of the digitalisation of signatures as well as avoiding more than 1.1 million printed pages, after the first year of implementation of their solutions.

On the other hand, the study found that digital identity solutions could improve the operational efficiencies of a company from an automated identity verification process resulting in 40,000 hours per year saved in identity verification.

Embracing digital transformation

These findings not only underscore a growing opportunity for businesses in the digital identity sector but also for the private and public sectors: as European companies continue to embrace digital transformation, the demand for robust digital identity solutions is expected to rise, offering a promising market for innovation and growth.

While businesses and governments in Europe are on the right track toward their digitisation, there is still a lot of work to be done, especially with the arrival of the eagerly awaited EU Wallets. A key element in Europe that will once again test the ability of both public administrations and private companies to offer 100 per cent digital access to their services, this time through a single point of access: their national digital identifications.

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