THE FINANCIAL services sector needs to attract and retain entrepreneurial talent to ensure the UK remains a vibrant fintech centre after Brexit, research suggests.
The latest CBI/PwC Financial Services Survey, released on Monday, found 54 per cent of firms want to see steps taken to attract entrepreneurial, digital and financial talent to the UK’s fintech sector.
Meanwhile, 52 per cent want to see an acceleration in the digitisation of services, and the same proportion want greater investment in the UK’s broader technology infrastructure.
Accessing talent was a particular concern among investment managers, general insurance and finance houses, whereas banks were preoccupied with promoting the digitisation of services and influencing global standards.
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The survey of 92 firms found optimism fell for the third consecutive quarter in 2017 in the three months to December, rounding off two years of continuous flat or worsening sentiment.
Growth in overall business volumes slowed for a second consecutive quarter, although conditions varied across the financial services sector.
Business volumes were unchanged in banking following two quarterly increases, whereas providers of specialist finance continued to report robust growth in demand.
Virtually all firms said the impact of Brexit uncertainty is the most serious threat to the UK’s position as a leading global financial centre.
Meanwhile, half of respondents said there is a perception that the quality of the UK’s physical and digital infrastructure lags behind other advanced economies.
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Rain Newton-Smith, CBI chief economist, said in order to restore confidence firms must get as much certainty as possible on what the UK is aiming for in the Brexit negotiations, the opportunities of success and the consequences of failure.
“The never-ending burden of regulatory changes is slowly sucking the life out of financial services firms, and has repercussions far beyond the Square Mile,” she said. “It puts a dent in the wider economy by acting as a drag on productivity, and consequently, living standards.”
Andrew Kail, head of financial services at PwC, said Brexit is just one of the issues the UK financial services sector is grappling with.
Investing in technology to improve efficiency and the customer experience, preserving profitability, and regulatory demands such as Open Banking are also high on the agenda.
“How the industry deals with this myriad of challenges will be pivotal to future success,” Kail added.
In the year ahead, financial services firms expect to ramp up investment into IT and marketing, but to cut back on other forms of capital spending.
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