AMs optimistic despite Brexit, macro and cyber concerns
Brexit preparations, macroeconomic uncertainty and
cyber-security threats are 2017’s top three concerns for UK asset managers,
according to the latest CBI/PwC Financial Services survey.
Despite these challenges, optimism has increased
dramatically in the sector since September and expectations for growth are the
strongest they have been in 18 months.
Employment numbers have improved since last quarter, with
asset managers spending more on training and developing their people in
response to ongoing regulatory scrutiny, including the FCA’s recent market
study.
“As the UK begins its negotiations to leave the European
Union, asset managers are aware their interaction with regulators will increase,”
Mark Pugh, asset and wealth management leader at PwC. “It is vital the industry
continues to work closely with both the government and the regulator to ensure
all parties are aware of each other’s needs and expectations.”
Engaging in strategic alliances continues to be a business priority for asset managers facing continued competition established fund houses as well as new entrants.
“It’s been quite a year for the UK’s asset management
industry but our survey shows future optimism remaining strong, with business
volumes expected to grow,” said Pugh. “Between the opportunities analytics will
offer for improved customer engagement and ongoing regulatory scrutiny, the
industry is sure to have a busy year ahead.”
Back in November post-trade giant DTCC similarly identified
the outcome of the US election and Brexit as among the top risks facing the global
financial system. The firm’s latest systemic risk barometer shows rising
concern cover the unpredictable nature of world events and sudden escalation
that could cause global market volatility and instability.
Cyber risk remains the top danger overall, according to the
DTCC survey, with 22% of respondents citing it as the single biggest threat to
the industry and 56% rating it a top five concern.
Looking to 2020, respondents say improvements in process
automation and data analytics are the biggest potential Fintech offerings –
suggesting a continued focus on back office operations and improved customer
interaction.
Experts at Boston Consulting Group (BCG) also warned the “dire
consequences” banks face if they fall behind on fintechs, as reported by Global Investor in October 2015.
“Automation of more simple processes, such as recording
client data on decentralised ledgers, for KYC and anti-money laundering purposes,
is likely to emerge first,” noted BCG in a recent paper.
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