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The Actuary The magazine of the Institute & Faculty of Actuaries

Financial services firms confident about next 12 months

Three-quarters of financial services firms in the UK believe their prospects will improve over the next year, despite many growing tired at delaying expansion plans due to Brexit.

Positive financial services sector ©iStock
Positive financial services sector ©iStock

That is according to a survey of over 1,000 companies by accountancy firm Smith & Williamson, finding that almost half believe their position will improve “significantly” over the next 12 months.

Firms are largely positive about recruitment, with more than three-quarters planning to boost their headcount during that time, while the majority also intend to increase borrowing.

“The sector has been quick to adapt to change with fast-growth businesses, talent and finance flowing into the FinTech sector,” Smith & Williamson partner, Guy Swarbreck, said.

“Considering the potential, and realised, impact of regular regulatory change and Brexit, it is heartening that financial services firms are so positive about the year ahead.”

The research also found that banks and investors could be loosening their purse strings, with 56% of financial services firms saying access to finance has improved in the last year.

That is eight times the 7% that feel it has worsened during that time, with 44% of firms saying they intend to borrow “much more” over the next 12 months to fund growth plans.

Companies are similarly confident about the economy, with 71% forecasting growth.

However, despite remaining bullish about recruitment, one in five firms said they currently lack access to the talent they need, with many often struggling to find staff with basic IT skills.

Swabreck warned that there are also concerns about regional development as London creates a “powerful ecosystem” of expertise and access to finance, while other regions miss out.

“As a nation, we need to find ways of encouraging this type of business clustering outside London,” he continued.

“While progress has been made in some areas, such as the process industry cluster in the North-West, biotech in Cambridge and Bristol’s tech cluster, it takes time to build momentum.”

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