Financial services 'enjoying steady growth'

The financial services sector has continued to enjoy a steady level of growth as the economic situation develops in its favour, according to a new report from PwC and the Confederation of British Industry (CBI).

Over the three months to March, investment intentions and optimism increased from the previous quarter, with business volumes up for the second consecutive quarter.

Life insurance was the only sub-sector not to enjoy higher volumes. However, overall growth was not as strong as expected, partly because business levels in the banking sector did not boom as much as had been expected.

However, a quicker pace of growth is expected over the next quarter of 2014 across most areas of the financial services sector.

Profitability also increased, although more slowly than it had done in the last three months of 2013, with a similar pace of expansion anticipated over the near future.

CBI director for competitive markets Matthew Fell said the development of further competition across the sector is a good sign of its overall health.

"It's also particularly encouraging to see that investment intentions continue to be positive across the board for the second consecutive quarter, strengthening further in some cases. Businesses plan to spend heavily on IT and are scrambling to find new professional staff to meet growth demands," he added.

Some 41 per cent of financial services firms said they felt more optimistic about their overall business situation than they had done three months ago, with just seven per cent describing themselves as less positive, giving a balance of +34 per cent.

Firms expect employment to rise by 46 per cent over the next quarter, suggesting 2014 could be a positive time for jobseekers and financial service professionals currently working but looking for a new role.

PwC financial services leader Kevin Burrowes expressed his optimism for the year ahead.

"Banks need to adopt bold new strategies as they face challenges around regaining trust, legacy issues, regulation and technology. Digital must be at the heart of their business," he added.