The latest update on sentiment among UK financial services firms from PwC and the CBI, shows that sentiment has stabilised after two quarters of severe falls. This survey has fallen every quarter except one since 2016, so perhaps rather than being the mediocre response it initially seems, stabilisation is a sign of future optimism?
There are strong indicators of growth with the majority of financial services sectors questioned looking to expand headcount, develop new products, expand marketing budgets and invest in IT. At Vested, this reflects what we’re seeing amongst our clients and networks and we’re excited by the level of passion from the industry we’re so passionate about too. And given the highly competitive nature of the industry, investment in these areas is crucial for firms looking to get ahead of the curve and lead the way developing their businesses in ways that help them to engage and retain customers.
Major challenges within the sector that continue to consume energy, time and budgets are Brexit and the bedding in of regulation including GDPR and PSD2. With those surveyed citing these as the most important barrier to growth, their impact can’t be avoided or downplayed. As we still eagerly await a Brexit deal, the prolonged uncertainty of what it really means for business is only heightening uncertainty of decision- making and the ability to truly plan for the future.
Despite the uncertain environment, we’re also musing what this survey would say, if it was expanded to include some of the younger areas of the industry such as Fintech, Insurtech and Crypto where firms are realising significant growth. Taking an even broader view of the sector would, we feel, shift the figures from stabilisation into positivity. Financial services is a growing sector that has started to expand around the edges, and embraces technology and the change it brings. The enthusiasm, alternate approach and product innovation that new businesses entering the market offer, are all helping to deliver growth within the wider financial services ecosystem.
The results of today’s survey point to continued times of challenge for financial services firms, but a central strength and optimism for the future. It’s an industry we’re proud to be a part of and supporting through the many changes it faces.