87% of financial services leaders are “confident” of business growth in the first quarter of 2024, rising to 89 per cent in banks, according to a new KPMG poll.
The research found that 83 per cent are optimistic for profitability this quarter, but warned of regulatory and economic pressures as a threat to the UK’s global competitiveness.
In total, 56 per cent claimed that inflationary pressures are among the biggest challenges in Q1, while 46 per cent stated interest rates as a significant obstacle.
KPMG’s survey polled 160 senior executives in the financial services industry to assess their outlook for the year ahead.
Karim Haji, global and UK head of financial services at KPMG, said: “It’s great to see financial services leaders go into the new year feeling confident despite economic turbulence, which is set to continue to challenge the sector in the first quarter.”
Despite pressures, 73 per cent were confident that the UK could maintain its global financial centre status over the next three years. Banking bosses were especially confident with 84 per cent being optimistic.
Reducing regulatory pressures, overhauling the tax system and tackling inflation were cited as the top wishes for financial services leaders to help the UK maintain its global position in the sector.
Responding to the findings, Wayne Johnson, CEO and Co-Founder of Encompass Corporation, commented: “Despite economic turbulence in 2023, findings like these show there is cautious optimism within the financial services industry as we enter 2024, buoyed by market confidence and the technological innovation that will be key to fuelling growth.
“With regulatory pressure noted as a particular threat to the UK’s position as a top global financial centre, this is a reminder of the critical importance of utilising technology as organisations respond. Banks are tasked with adhering to increasingly stringent compliance standards to protect against financial crime, and must harness the innovation at their disposal to implement truly robust processes.
“Today, technology exists, in the form of digital Know Your Customer (KYC) profiles, generated automatically and on-demand from authoritative data sources, which can ensure a consistent approach to compliance every time. This is as well as maximising efficiency and, crucially, dramatically improving customer experience, helping banks to propel their own growth.
“Supporting innovation has been central to cementing the UK’s financial services sector as a leading global hub, and we must capitalise on current confidence to reach full potential.