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Brexit Means....Bashing The Ear Of The Regulators ?

Posted on January 23, 2017 at 10:25 AM

Financial services: optimism about the overall business situation fell for the fourth consecutive quarter, the longest period of declining sentiment since the global financial crisis of 2008, and the sharpest fall since December 2008.

So says the quarterly survey of 103 firms in the latest CBI/PwC Financial Services Survey. "A more pessimistic mood was particularly prevalent among banks, with general insurers and finance houses also less optimistic. However, investment managers, life insurers and insurance brokers were more optimistic than they had been three months earlier" it suggests.

Asked about the main challenges for financial services firms in 2017, a range of concerns emerged. Nine in ten banks saw preparing for the impact of Brexit as the number one challenge. "Firms in every sector see the need to intensify their dialogue with regulators in response to uncertainty around Brexit" says the survey. (my emphasis) Hmmm.

The survey tries to temper the doom and gloom with the opportunities: "a further sign of an improving picture, with numbers employed edging up during Q4 and a more solid increase predicted for the next three months." Strange that, when the banks are talking about shifting people out of the country.

It also talks about the opportunities for FinTech.

Financial services firms see the main potential of FinTech investment over the next 3 years to be in process automation (82%), data analytics (68%) and digital transformation (58%). At least one or two of those, I would have thought, affect jobs.

Late last year Business in The Community brought together more than 350 senior leaders from business to debate how digital transformation is changing business, society and the world of work - and to explore how to make the transition without leaving people behind. How much time do financial services firms - and their boardrooms - spend thinking about that at the moment I wonder, given their other concerns ?

I covered it in November 2016 on Forbes: Digital Transformation Is About People: UK In Call To Business.

When asked to name the top three challenges facing the financial services sector over the coming year, firms ranked the number one challenge as preparing for the impact of Brexit (ranks were converted to scores, with the impact of Brexit attaining 42% of the maximum score), says the survey.

This was followed by macroeconomic uncertainty (35%) and regulatory compliance (31%), it says.


Banks overwhelmingly saw preparing for the impact of Brexit as the number one challenge (94% of maximum score).

The majority of building societies saw macroeconomic uncertainty as the prime challenge (64% of maximum score).

Competition was the overwhelming concern of insurers (82% of life insurance, 71% of general insurance, and 63% of insurance brokers).

I don't know about you, but I am not sure how this separate 'labelling' helps anything, apart from serving not to irritate Theresa May by putting all the onus on Brexit.

Financial services is a terrifying place to be at the moment, surely - let's hope those boardrooms are full of conversation about strategy and people.

If regulatory compliance only concerns 31%, what do firms in every sector want to "intensify their conversation with the regulator" for ?

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Categories: Governance, Regulation, Business