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Your support makes all the difference.Sentiment among companies in the UK’s financial services sector fell in the three months to June, meaning that confidence has now declined during five out of the past six quarters as the prospect of Brexit continues to bite.
According to a survey carried out by PwC on behalf of the Confederation of British Industry (CBI), 15 per cent of firms questioned said that they were more optimistic about the overall business situation compared with three months ago, while 25 per cent said they were less optimistic, giving a balance of –10 per cent.
Rain Newton-Smith, CBI chief economist, said the continued drop in optimism was likely to reflect “a mix of Brexit uncertainty and concerns that financial market conditions could tighten”.
Andrew Kail, head of financial services at PwC, cited “the ongoing wait for an agreed Brexit blueprint” and “the performance of the wider economy” as causes of doubt within the financial services sector.
But despite the pessimism, financial services firms were able to build on the growth in business volumes recorded during the first quarter of 2017, driven largely by demand from private and corporate clients.
A total of 47 per cent of firms reported an increase in business volumes, compared to 3 per cent who reported a fall, and growth is expected to extend to the next quarter, albeit at as slower pace, with 40 per cent of firms forecasting the rise in volumes will continue.
Areas of the industry that are particularly optimistic include finance houses, insurance brokers and investment managers – all reported feeling more upbeat compared to three months ago.
Mr Kail noted the positive impact of digital advances on the sector as a whole, both in terms of customer services and the running of businesses themselves. “We are seeing plans in this area accelerate markedly,” he said.
Almost two-thirds of financial services companies are actively investing in operational data analysis and almost half are doing the same for process automation.
Ms Newton-Smith said: “It’s encouraging to see financial services firms continuing to seek out future opportunities and staying ahead of the curve when it comes to investment in new and innovative technologies.”
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