Fintech “critically important” for future of UK financial services
MAINTAINING the UK’s position as a leading fintech and innovation hub is “critically important”, according to a survey of City firms.
The CBI/PWC financial services survey, released on Monday, questioned 94 companies, including banks, finance houses, securities traders, fund managers and the insurance industry.
Fintech was cited as critically important for securing the future of the UK financial services industry by more than two-thirds of respondents – more than any other factor.
Banks in particular saw a need to ensure that the UK remains a leading fintech and innovation hub.
Ensuring access to domestic and global talent, as well as strong, internationally-focused regulation, were also ranked highly by the respondents.
The quarterly survey found that overall business optimism fell slightly, continuing a downward trajectory since the start of 2016.
Firms reported growth in both business volumes and profits, although the pace had slowed compared the first half of the year.
Investment intentions have improved significantly with firms increasing their marketing budgets and planning to ramp up investment in IT and property.
“It’s encouraging to see volumes and profitability continuing to expand for most financial services firms, with hiring expected to pick up and investment intentions improving,” said Rain Newton-Smith, CBI chief economist.
“While demand in the sector is expected to hold up in the near-term, we can’t ignore the fact that optimism has dropped in almost every quarter for the past two years.
“With Brexit uncertainty affecting the wider economy, it’s vital that substantive progress is made during the next round of Brexit negotiations, so that transitional arrangements can be agreed and businesses can make decisions now about investment and employment that will affect economic growth and jobs far into the future.”