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Almost 90% of financial services firms are confident their business will perform well over the next 12 months, according to research from Davies.
However, almost half of these businesses are wary of potential economic turbulence caused by the general election in July.
The study also found that 89% of businesses rated their performance over the last 12 months as ‘good’ (50%) or ‘very good’ (39%).
Furthermore, businesses are also worried about regulatory compliance (43%) and cybersecurity threats (38%).
Two thirds (67%) of UK financial services firms said interest rate hikes have had a “significant impact” on their offering since the start of 2022, while 66% said the same about the cost-of-living crisis.
Pino Vallejo, CEO of consulting at Davies, said: “Given the challenging economic climate that has defined the past three years, it is positive to see that the UK’s financial services sector is full of confidence.
“Fuelled by strong performances over the past year, the research clearly highlights that most businesses are striving for more growth in the next 12 months. But there is also evidence of some caution, not least in navigating further economic challenges, with the general election likely to prompt more turbulence over the summer months that businesses will have to navigate carefully.”
Ashley Sheen, consulting at Davies’ chief strategy officer, added: “The past three years has seen us move from a persistent, near-zero rate environment to one with the prospect of meaningful interest rates prevailing for at least the medium term. This has forced financial services businesses to adapt.
“While it is reassuring to see many optimistic about the year ahead, further innovation will be required to remain competitive. Customers continue to demand solutions that reflect the prevailing economic climate and embrace emerging technology. This is certainly not a time for complacency.”
