Insight into the Financial Services market from BRUIN Financial
Paradoxically, in the midst of a recession that was largely blamed on the financial services sector, the government asserted its faith in the importance of financial services and the contribution financial firms make to the UK economy. This comes as little surprise given the sector employs over two million workers (contributing to around 3.4% of all UK jobs) and in 2014, financial and insurance services contributed £126.9 billion in gross value added to the UK economy, making up 8.0% of the UK’s total, and provided almost 14% of UK tax revenue.
It appears that this faith in the sector has been rewarded, as the UK economy begins to now stabilise – and after many years of reputational damage, the financial services industry seems to have been extended an olive branch by its regulatory masters. At the summit of EU policymaking in April, Lord Hill, European Commissioner for Financial Stability, remarked to attendees – namely banks, asset managers, law firms and City Trade associations – that “it was time for financial services to be reinvited into polite society”. Soon after, August brought the news that UK output per head has finally, after nearly seven long years, surpassed its pre-crisis peak.
As we tentatively emerge from the crisis, it now seems an appropriate time to ask – what lessons has the sector learnt? A lack of understanding about risk, insufficient regulatory control, a homogenous workforce, inappropriate remuneration policies and a deeply entrenched profit-driven culture have all been cited as contributory factors to the economic downturn, but what steps have been taken to address these over the last seven years? And what is the opinion of those working in financial services about the industry now?
City Horizons explores these questions, looking at the perspectives of those working in financial services, canvassed over a 3 month period in 2015.