KPMG’s latest UK Financial Services Sentiment Survey (FSSS) shows that two-thirds, or 67%, of the country’s financial leaders are more positive about the sector’s future growth under the new government.
Conducted after the General Election, the quarterly poll tracked the sentiments of 150 leaders in banking, insurance, asset and wealth, and private equity. The survey also showed that the financial sector is now more optimistic about its future as it enters the global stage and 61% of the leaders are more positive about the country’s financial services competitiveness under the new government.
The reason behind this optimism, the survey noted, is the relationship between the State and the business sector, and the government’s plans for how financial services will continue to grow. The FSSS showed that 23% of the UK’s financial leaders say that the new government has good relationships with industry bodies and regulators, while 22% say that the new government has a clear plan to grow financial services.
“A change of government always marks a new chapter for the country. Most financial services leaders are expecting a brighter future under the new government, buoyed by both the prospect of national change and continuity of financial services policy and reform,” said Karim Haji, global and UK head of financial services at KPMG.
Meanwhile, the FSSS also found that 90% of leaders plan to increase their footprint outside of London in the next five years. It noted that 57% of the businesses are planning to open new offices outside the capital and 48% will expand existing regional offices.
Regarding expansion, the FSSS showed that 23% of the businesses plan to expand across the east of England while 18% eye expansion in Scotland and the Yorkshire and Humber respectively. The new survey also showed that Manchester was the city outside of London cited most (47%) by leaders as having the greatest potential to be the UK’s second city for financial services, followed by Birmingham (20%) and Edinburgh (11%).
Moreover, 39% of the financial leaders say that the regional expansion of their global counterparts outside London would most support financial services growth across the UK. Meanwhile, 25% felt that greater investment in regional infrastructure would boost sector growth outside of London, while 22% said that local government needs to have more powers to support financial services clusters to help boost the sector’s presence across the country.
The majority of the UK’s financial leaders are confident about business growth (87%) and profitability (88%) over the period, which they say will be driven by increased demand for products and services (49%), new technology (45%) and plans to enter new markets (41%).
However, the survey noted that leaders also called out specific areas of focus to ensure sector growth over the next five years. Twenty-three per cent (23%) of the leaders said innovation is needed to help solve environmental and socio-economic changes such as climate change and ageing populations, followed by 21% saying more effort was required to make the UK more attractive to overseas talent through infrastructure investment, housing, and immigration changes.
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