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
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
"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
"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
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.