Senior executives across the global banking and finance sector are growing more optimistic around the economic outlook and their firms’ prospects for growth, according to new research from Swiss and Spanish stock exchanges operator SIX.
Over three-quarters (77%) of senior finance executives globally expect the economic environment to improve over the coming year, up considerably from two-thirds (66%) in 2022. That is according to the latest Future of Finance Study by SIX – an annual survey that canvasses the opinions of senior executives across 343 financial institutions across the world.
Growing levels of optimism among respondents are also evident in how companies view their positions for growth over the next three years. Globally, a considerable 64% of companies feel they are strongly positioned for significant growth – up meaningfully from 51% last year. Businesses headquartered in Switzerland, Singapore, and the US are most bullish on their prospects for growth, with 72%, 71% and 70% of respondents in these regions, respectively, stating they are strongly positioned.
From an institutional perspective, firms operating in the investment banking space are most optimistic, with 74% of respondents in this field feeling well positioned for significant growth. However, positivity is felt across all institution types, with the wealth management and asset servicing sectors markedly more optimistic than last year.
As for the themes driving growth expectations, identifying and implementing artificial intelligence (AI) use cases was seen as the most compelling opportunity for companies, selected by 38% of respondents globally. Enhancing high quality data and analytics capabilities, however, was nearly as popular, chosen by 35% globally. The opportunity presented by alternative asset classes is another commonly cited theme. The asset management space is most enthusiastic about this, with a considerable 41% feeling alternatives represent the biggest opportunity for growth.
Despite respondents generally anticipating more favorable conditions for growth over the coming years, they also cite several macroeconomic concerns that could constrict it. The three most selected headwinds among respondents were regulatory changes, increasing systemic global financial risk, and geopolitical uncertainties.
“While many of the economic factors troubling financial executives a year ago – from rising interest rates to elevated geopolitical unrest – persist today, the rate of technological progress witnessed over the last 12 months poses a tremendous growth opportunity,” said Jos Dijsselhof, CEO SIX. “Market participants are well aware of this, and most are taking meaningful steps to capitalize on it. Whether they are successful in doing so rests on several factors, from how effectively they can integrate emerging technologies, to the rate at which market regulators and financial market infrastructures can adapt to the swiftly evolving market environment.”
The full Future of Finance Study, comprised of four chapters covering growth, data and analytics, technology, and risks and regulation, is available here.