Optimism in the UK's financial services sector fell for a third consecutive quarter in the final three months of 2017, rounding off two years of continuous flat or worsening sentiment.
That is according to a survey of 92 firms by the Confederation of British Industry (CBI) and PricewaterhouseCoopers (PwC), finding that 91% think Brexit is the most serious threat to the UK's position as a leading financial centre.
The next biggest concern is the country's physical and digital infrastructure, with half the respondents saying it lags behind other advanced economies, while a third worry about an increasingly complex tax regime and the gold-plating of international standards.
"Firms are nearly unanimous in voicing their concern about the damaging impact of Brexit uncertainty and the need for the UK to remain a vibrant centre of FinTech and innovation," CBI chief economist, Rain Newton-Smith, said.
"To restore some confidence, financial services firms absolutely must - no ifs, no buts - 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."
Despite falling optimism, the subdued mood last quarter was not universal, with life insurers reporting business volumes well above normal in the last three months of 2017, while investment managers also felt more positive.
In addition, the life sector is forecasting a further uptick in business over the first quarter of this year, with PwC UK insurance leader, Jim Bichard, saying confidence within the sector has outstripped the rest of the financial services community.
"Most life insurers have now emerged from beneath the shadow of pension annuity reforms," he said. "They now feel they have got some clarity and are moving forward with the changes.
"This has paved the way for a change in strategy to focus much more around wealth and asset management."
However, general insurers' confidence fell in the last quarter of 2017, despite a solid increase in volumes and a further rise in activity expected across the first three months of 2018, while optimism among the insurance broking community dipped for the first time in five years.
Both life and general insurers reported the need to ensure the UK remains a leading FinTech and innovation centre, with attracting talent, accelerating the digitalisation of services, and ensuring sufficient investment, seen as the three most important courses of action.
"Focusing on FinTech more generally, the biggest hurdle facing the insurance sector is having the people who understand it," Bichard continued. "Our clients believe the best way to be more FinTech- enabled is to invest in people."