Majority of banking CEOs optimistic on revenues

NINE out of ten banking chief executives are optimistic about revenues while more than half expect to take on staff in the next year, a new survey shows.

According to PwC’s annual CEO survey, more than 70% of banking and capital markets CEOs see cyber insecurity as a threat to their growth prospects while nearly 60% see the speed of technological change as a threat to their growth prospects.

The survey, which includes responses from 133 banking CEOs in 50 countries, also found that the number who believe that the global economy will improve over the next 12 months has almost tripled since last year – 56% now compared with 19% last year.

This buoyant outlook is reflected in the fact that more than half plan to take on more staff over the coming year, with most of those anticipating headcount increases of at least 5%.

Over-regulation, slow or negative growth in developed markets, and the response of governments to fiscal deficits and debt burdens pose the greatest challenges to their prospects. Eight in ten CEOs see their operating costs rising and half believe that their ability to pursue market opportunities and innovate are hampered as a result of regulation.

Gary Shaw, financial services leader for PwC in Yorkshire, said: “Banking and capital markets CEOs are markedly more optimistic about the global economy and their prospects for growth than they were this time last year. To position their organisations to take advantage of this growth, they can’t afford to fall behind the accelerating pace of change in their marketplace.

“Industry leaders see technology, including the digital economy, social media, mobile devices, big data and other developments, as likely to transform their businesses over the next five years.

“The organisations that will come through the shake-up in the strongest position to compete will be marked out by leaders who can manage through uncertainty and complexity as they seek to deal with regulatory upheaval while preparing for the future.”

Commenting on banking cyber security issues, Will Richardson, partner and fraud expert at PwC in Yorkshire, said: “The recent Waking Shark 2 exercise demonstrated the real progress that the financial services industry and its regulators have made in beginning to pull together a co-ordinated response to the cyber threat. With such a dynamic threat, and ever-increasing interconnectedness in the industry, continuing that progress will remain a priority for some time to come. All companies should have a clear understanding of the cyber threats they face and the measures they need to take to be confident in their ability to manage risk and become cyber secure.”