Optimism on the up in financial sector

The financial services sector is looking in relatively rude health and is expected to further improve over the coming months, which will be gratifying news for anyone looking for a new position in the industry, as well as reassuring given the problems it has faced over the last five years.

According to the latest CBI/PricewaterhouseCoopers (PwC) Financial Services Survey, business volumes in the financial services sector grew significantly over the three months to June 2013, although overall profits did dip slightly.

This had been predicted in the last report from PwC and the CBI, which correctly predicted that a sharp fall in average operating costs and strong business volumes growth would be offset by flat average commissions, fees and premiums.

"Financial services firms have seen another strong quarter of business growth and optimism continues to improve," said CBI director of economics Stephen Gifford.

He argued that a further increase in volumes and a depreciation in operating costs could see profitability rise again in the next quarter, while admitting that more regulatory changes will cut into budgets as firms react to the various demands placed on them.

A survey within the report found dealing with statutory legislation and regulation is likely to be the biggest investment driver for financial services firms over the next 12 months, with respondents also suggesting that headcount across financial services is to grow in the next quarter.

However, a third of industry workers warned that a shortage of suitably-skilled staff could limit the levels they operate at in 2013, indicating that more needs to be done to train and improve the position of financial services workers.

Kevin Burrowes, PwC's UK financial services leader, said: "Banking confidence continues to grow, increasing at the fastest rate since 2000.  The banks' upbeat mood is supported by many factors including a strong rise in business volumes and strong activity with commercial and retail customers."

If not implying further demand for credit this at least suggests overall economic performance is improving, the PwC chief concluded.