The message from the Chancellor in the Autumn Budget was loud and clear: Britain must “invest, invest, invest” to grow the economy, outlining the Labour Government’s plans for a National Wealth Fund and a new modern industrial strategy.
However, in the fallout from the headline announcement of a £40 billion tax rise, with £25 billion to come from employer national insurance contributions increases, the business community’s reaction has largely been negative[1].
While business leaders may not all agree with the Chancellor’s remedy for fixing the economy, the diagnosis of the underlying problem is clear: the lack of investment—especially in digital technology—is holding back UK businesses.
Research of 400 financial leaders commissioned by Equals Money in September 2024 revealed that 90% had been impacted by Budget uncertainty, with 70% delaying or cancelling planned investments in 2024 as they awaited clarity.
The hesitancy to invest is understandable, given recent energy price shocks, rising geo-political tensions and a change in government. But the cautiousness reflects a broader trend. UK business investment has historically been low, ranking only 28 out of 31 OECD countries in business investment[2], with the UK having the lowest level of investment of G7 economies in 24 of the last 30 years.
Meanwhile, despite having a thriving fintech sector, the UK sits in 18th place out of 67 economies in the World Digital Competitiveness rankings[3], which measures the capacity to adopt and explore digital technologies as a key driver for economic transformation in business, government and society.
Indeed, of the financial leaders surveyed by Equals Money, only 45% currently use budgeting and forecasting software, and 26% still rely on manual tracking methods. This is despite 30% saying data and financial insight are critical for all decisions and 58% saying data is used regularly.
The figures paint a stark picture of chronic underinvestment. As long as digital adoption remains patchy, businesses will remain vulnerable to changes outside of their control and experience barriers to growth.
Investing in digital tools is no longer optional for businesses that wish to compete in increasingly overcrowded markets, where speed and agility are essential to respond to frequent changes.
Digital financial tools enable businesses to gain financial visibility, enhance operational efficiency, minimise risk, and drive productivity gains. With real-time payments and multi-currency account options, for example, businesses can accelerate cash flow, streamline international transactions, and reduce costs through competitive exchange rates. Instant transfers provide immediate financial flexibility, allowing companies to make timely decisions and maintain stronger liquidity.
Automated expense management is another advantage, offering real-time tracking and seamless transaction monitoring. By digitising expense tracking, businesses reduce manual errors and save valuable administrative time, gaining instant visibility into spending patterns to manage budgets more effectively.
Predictive analytics and AI-driven insights take this a step further, empowering financial leaders with advanced forecasting and spend analysis. With AI-powered cash flow forecasting, companies can anticipate liquidity needs and identify cost-saving opportunities, enabling them to make data-driven, proactive decisions.
These insights are vital for setting strategic priorities and building a resilient financial foundation. Businesses that rely on manual processes leave themselves at a competitive disadvantage, remaining reactive rather than proactive. Effectively, they’re operating in the dark.
Encouragingly, there are signs of change. The Equals Money survey revealed that 81% of financial leaders plan to upgrade their financial tools in 2025.
While financial leaders can make individual investment decisions, the wider UK business community also needs to undergo a fundamental cultural change and be far more open and proactive in adopting digital technologies if it is to avoid falling further behind international competitors.
Market behaviour and consumer expectations have shifted, and their attitudes must change. Without that digital-first mindset, business growth will continue to lag. If businesses are to overcome uncertainty and plan for the future, then gaining financial clarity is fundamental. The tools are there, but the investment is missing.
[1] IOD, November 2024
[2] IPPR, June 2024
[3] IMD, November 2024
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