Survey shows optimism boost in financial services sector
Businesses in the financial services sector felt more optimistic in the first quarter of 2017 than in the previous quarter, despite uncertainty over Brexit, according to the most recent CBI/PwC Financial Services Survey.
The quarterly report surveyed 98 businesses and found that the level of optimism was varied across sectors, with investment managers, building societies, insurance brokers and life insurers feeling the most optimistic in the first quarter of the year.
The survey also showed growth in business volumes in the first quarter of the year, with investment managers and building societies reporting a growth in activity.
However, some businesses were found to be feeling cautious, with optimism being lower among finance houses and general insurers, whilst growth in business volumes is expected to slow during the summer.
The survey also revealed the investment plans of financial services firms, with combating cybercrime being found to be their main priority. Over four-fifths of businesses in the sector are planning to invest in technology and IT systems, whilst more than two-thirds of companies will be focusing on diversity.
Commenting on the survey, CBI Chief Economist Rain Newton-Smith said that it is good that financial services companies have started 2017 with a spring in their step – notwithstanding the uncertainty of Brexit – with volumes expanding at a robust pace, profitability increasing and hiring on the up.
He mentioned that underlying business in this sector has been holding up well, and people are optimistic about the global markets – along with stronger global growth, this is proving to have a positive knock-on effect.
He added that while demand in the broader economy in the UK has proved to be resilient, it is likely that growth will slow as the year progresses, amid wider uncertainty and increased inflation.