Life assurance and asset management companies are set to continue recruiting as optimism in the UK’s financial services sector increases.
The latest quarterly CBI/PwC survey of the sector found firms more upbeat about their prospects than at any time since 1996, with 59% saying they were now more optimistic about the future.
However, business volumes unexpectedly dropped 10% in the period as interactions with industrial and commercial companies fell 18% and international transactions dropped by the same amount.
Despite the dip partially offset by a 13% uplift in business with financial institutions more than half of respondents expected business volumes to increase in the next quarter, compared with just 4% who expected a decrease.
The study also found employment in financial services roles increased significantly (+24%) in the three-month period to September, and the expectation was that numbers would grow further in the quarter ahead.
Catrin Thomas, financial services partner, PwC in Scotland, said financial services were following in the footsteps of the wider UK economy as it gradually got back on its feet.
“Buoyed by signs of a steady and gradual recovery in the UK economy, levels of optimism and confidence across the financial services are continuing to rise a trend that’s also being mirrored in other business sectors,” Ms Thomas said.
“Our latest survey reflects a strong focus on organic growth across many financial services sectors, particularly in relation to IT investment, strengthening digital capability, infrastructure and product development.
“This is partly being driven by an increasing demand from customers for clarity, simplicity and reliability in their dealings with financial services, from banks to insurance, with other industry groups already setting a high bar in customer service for others to follow.
“We also expect to see headcount among sectors such as life assurance and investment management, which have a strong presence in Scotland, increase in the coming months as businesses gear up for renewed growth.
“For many businesses, however, the issue of regulation and its related cost burden, combined with an increasingly competitive marketplace, remain a source of uncertainty and concern.
“Nevertheless, the mood appears to be positive, with the search for growth opportunities continuing unabated.
“Hopefully we’ll see the full effect of the UK’s economic recovery and this organic push reflected in performance and business volumes as we head into 2014,” she added.
CBI director of economics Stephen Gifford said: “Financial services companies are less worried than they were about a potential lack of demand, but dealing with regulation is increasingly weighing on plans for business expansion.”