Pushed by the pandemic, the financial sector had to accelerate its plans and pivot quickly to digital during the past few years. At the same time, the industry had to deal with major challenges, such as the Great Resignation, the shifts of an ever-evolving working environment, the proliferation of FinTech, supply chain issues, and apprehensive investments.
Entering the next page of the global economic recovery, digitalisation continues to be the most prevalent trend in the financial services industry. Across sectors, financial organisations are looking to overcome challenges by prioritising digital transformation and by leveraging technology – climate data, digital wallets, embedded finance, digital identity, digital assets, central bank digital currencies (CBDCs), and the Metaverse offer a huge potential for growth within the sector.
Looking ahead to 2023, ESG initiatives, FinTech, digital transformation, sustainable investments and consumer adoption, understanding and trust of new and emerging financial technologies seem to be the topics dominating the financial services agenda.
Here, Templeton & Partners provides the latest UK, European and global market overview of the Financial Services industry. Specifically, the report covers the following topics:
- Global Financial Services Market Overview
- European Financial Services Market Status
- UK Financial Services Industry Outlook
- Financial Services Market Regulatory Outlook
- ESG Approaches for Financial Services
- The FinTech Industry
- Technology Trends in Financial Services
- Digital Transformation Challenges
- Digital Transformation in Financial Services
The most recent research and projections from leading publications and institutions, such as The Wall Street Journal, Deloitte, Bloomberg, Ernst & Young, PwC, IBM, Gartner, IMF - International Monetary Fund, reveal expert insights into the current trends, challenges, and opportunities that will shape the future of the Financial Services industry.
Download our free Digital Transformation in Financial Services Market Intelligence Report 2022
Global Financial Services Market Overview
- Global Market Growth Projections – The global financial services market size is expected to grow from $23.31 trillion in 2021 to $25.83 trillion in 2022 at a compound annual growth rate (CAGR) of 10.8%. The global financial service market share is then expected to grow to $37.34 trillion in 2026 at a CAGR of 9.6%. (Reportlinker)
- Global Market Share – Western Europe was the largest region in the global financial services market, accounting for 40% of the market in 2020. The second-largest region was North America, accounting for 27% of the global financial services market and Africa was the smallest region. (Business Wire)
- Key-Industry Players – Major players in the global financial services industry are Allianz Group, Industrial and Commercial Bank of China, JPMorgan Chase & Co., Ping An Insurance, Axa Group, Anthem, Inc., Agricultural Bank Of China, China Life Insurance, China Construction Bank, and Centene. (Research and Markets)
- Global Payments Industry – The global payments industry has witnessed a rapid increase in the adoption of EMV technology shaping the global financial services market. This growth is driven by a higher level of data security offered by EMV chips and PIN cards as compared to traditional magnetic stripe cards. EMV is a security standard for various payment cards including debit, credit, charge, and prepaid cards. (The Business Research Company)
- The Banking Industry in 2022 and Beyond – Despite an expected uptick in interest rates in 2022, net interest income/net interest margins (NIMs) may take a while to return to pre-pandemic levels. U.S. and Canadian banks should exhibit faster growth in profitability than other major markets, while many European banks may not see increases in profitability until after 2022. (The Wall Street Journal)
- The Investment Market – The global investment market is expected to grow from $3.192 billion in 2021 to $3.618 billion in 2022 at a compound annual growth rate (CAGR) of 13.3%. The market is expected to grow to $5.716 billion in 2026 at a compound annual growth rate (CAGR) of 12.1%. (Yahoo Finance)
- ESG in Financial Services – ESG is top of the global agenda, especially in the financial services industry. Trillions of dollars have shifted into ESG-linked financial products and services opening up new markets. Today global ESG investing is estimated at over $30 trillion AUM (Assets Under Management), by 2025 it is expected that approximately a third of all global AUM are forecast to have ESG mandates. (KMPG)
- Digital Transformation in Financial Services – 3 in 4 banks and credit unions today have embarked on a digital transformation initiative. Another 15% are planning to implement a digital transformation strategy by the end of 2022. (PaymentsJournal)
- FinTech – The FinTech industry is on track to reach $179 billion by the end of the year and is predicted to reach $213 billion by 2024. (Deloitte)
European Financial Services Market Status
- European Banking Outlook – A combination of M&A, upgrades to consensus net interest income and sizable buyback programs look set to be positive catalysts for European banks in 2022, with provisions far less of an earnings-upgrade driver than in 2021.
- Investment Banking – The largest investment-banking franchises rank highly among the institutions with the biggest revenue upgrades this year, with UBS topping the charts thanks to Equities trading and IB fees, and Barclays and Deutsche Bank both at 10%-plus. HSBC is also in the group, appearing to finally have turned a corner. (Bloomberg)
UK Financial Services Industry Outlook
- Current Industry’s Status – Financial Services organisations expect business volumes to remain flat and returns to fall over the coming months, but investment in technology will continue to rise. (PwC UK)
- Digital Transformation Investments – According to a recent Deloitte survey, 85% of the respondents that use artificial intelligence (AI)-based solutions in the pre-investment phase either strongly agreed or agreed that AI helped them generate alpha. Nearly three-fourths of survey respondents said that they would increase their budget for alpha-generating technologies such as AI, including NLP/G, and alternative data over the next 12–18 months.
- NLP – Following a decline in non-performing loan (NPL) rates over the past months, banks expect them to increase over the coming quarter. (PwC UK)
Download the Free Market Intelligence Report to discover more on:
- Industry Challenges – How the Financial Services industry will keep up with the market pressures and the ongoing changes in regulations and technology?
- Market Key Trends – How financial institutions are exploiting and adopting to the new ways exponential technologies such as automation, hybrid cloud, and AI?
- Drivers for Digital Transformation – Which are the leading drivers of digital transformation in the Financial Services sector?
- Global Market Projections – What’s in the future of the Banking, Investment, FinTech, Insurance and Real Estate industries?
- ESG – How can organizations establish an effective environmental, social and governance (ESG) framework to meet regulatory expectations and incorporate sustainability measures into their operating models?
