Almost nine in 10 (89 per cent) financial service firms say they have performed well over the past year, research from Consulting at Davies has revealed.
The research, which surveyed 501 senior decision-makers within UK-based financial services companies, found that 50 per cent of businesses rated their performance over the past 12 months as “good” and 39 per cent rated their performance as “very good”.
Consulting at Davies chief strategy officer, Ashley Sheen, said: “The past three years has seen us move from a persistent, near-zero rate environment to one with the prospect of meaningful interest rates prevailing for at least the medium term.
“This has forced financial services businesses to adapt. While it is reassuring to see many optimistic about the year ahead, further innovation will be required to remain competitive.
“Customers continue to demand solutions that reflect the prevailing economic climate and embrace emerging technology. This is certainly not a time for complacency.”
The future
Looking ahead, 89 per cent said they are confident about how their business will perform over the coming 12 months.
However, the research found that economic turbulence remains a “notable” concern.
When asked about the biggest challenges their business is facing at present 44 per cent selected economic turbulence, making it the most common challenge ahead of regulatory compliance, identified by 43 per cent, and cybersecurity threats, 38 per cent.
With more economic turbulence expected as the UK general election approaches on July 4, this challenge is likely to become more pronounced over the coming months.
Elsewhere, two thirds (67 per cent) of UK financial services firms said interest rate hikes have had a “significant impact” on their offering since the start of 2022, while 66 per cent said the same about the cost-of-living crisis.
Consulting at Davies CEO, Pino Vallejo, said: “Given the challenging economic climate that has defined the past three years, it is positive to see that the UK’s financial services sector is full of confidence.
“Fueled by strong performances over the past year, the research clearly highlights that most businesses are striving for more growth in the next 12 months.
“But there is also evidence of some caution, not least in navigating further economic challenges, with the general election challenges, with the general election likely to prompt more turbulence over the summer months that businesses will have to navigate.”
tom.dunstan@ft.com
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