A recent study conducted by KPMG UK has unveiled the prevailing optimism among financial services leaders regarding business growth in the first quarter of 2024. The research, which surveyed 160 director-level individuals in the financial services industry, found that 87 per cent of respondents expressed confidence in the growth prospects for their respective companies.
The survey revealed that the highest level of confidence was observed among professionals in the banking, asset, and wealth management sectors, with 89 per cent of those surveyed anticipating business growth in Q1. Following closely behind were insurance executives, with 79 per cent expressing optimism for growth in the upcoming quarter.
Karim Haji, the Global and UK Head of Financial Services at KPMG, remarked on the resilience of financial services leaders in facing economic challenges. He noted, “It’s great to see financial services leaders entering the New Year with confidence despite ongoing economic turbulence, which is expected to continue to challenge the sector in the first quarter.”
The study also indicated that while 61 per cent of respondents held a positive outlook for the UK economy in 2024, more than half (56 per cent) expressed concerns about inflationary pressures as the greatest challenge for their businesses in the first quarter. Following closely behind were worries about interest rates and cost pressures, cited by 46 per cent and 37 per cent of the respondents, respectively.
Despite ongoing political uncertainty and global conflicts, geopolitical risks were ranked as a lower concern, with only 21 per cent of respondents mentioning it as a significant challenge. Haji highlighted the potential impact of geopolitical uncertainty on inflationary and interest rate pressures, emphasizing the need for a keen eye on sector confidence beyond the first quarter.
In terms of hiring and employee retention, the research found that 79 per cent of financial services executives are confident in their ability to recruit the necessary skills in Q1. Workforce investment priorities for 2024 include recruiting and retaining talent, enhancing employee mental health, and accelerating diversity and inclusion programmes.
Furthermore, 38 per cent of the respondents emphasized the importance of ethnic diversity as the key area of focus for the sector’s diversity and inclusion initiatives in 2024, followed by gender and socio-economic diversity at 33 per cent each. Haji commented on the sector’s confidence in its progress in D&I policies, emphasizing the need for external assurance to benchmark against competitors.
The study’s findings provide valuable insights into the sector’s outlook and priorities for the year ahead. The resilience and optimism exhibited by financial services leaders in the face of economic challenges demonstrate a proactive approach to navigating the evolving landscape. As the year progresses, it will be crucial for the sector to adapt and innovate in response to the dynamic economic and geopolitical environment.
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