On the 20th anniversary of the Confederation of British Industry and PricewaterhouseCoopers Financial Services Survey, twenty leading figures from across the financial services industry have given their views in a report entitled “20/20 Vision – The Future of Financial Services” (the Report). The Report provides a review of the industry over the last twenty years, as well as views on where the industry is going and the challenges it will face over the next twenty years.
In particular, the Report looked at the following issues:
- The future shape of the financial services industry;
- Customers and products;
- Government intervention and regulation; and
- UK competitiveness and London as a leading financial centre.
According to those interviewed for the Report, London’s position as a leading financial services centre has not been dented by the financial crisis. However, the risk of unilateral regulatory action in the UK and the economic shift towards the East pose two very serious threats. The Report found that the competitiveness of the UK’s financial services sector is more likely to be undermined by the uncertainty surrounding future regulation of the industry, than by further aftershocks from the recent crisis. There was widespread consensus in the Report that the only real long-term solution to the crisis will come from coordinated global action.
In relation to the insurance sector, the Report predicted that insurance will see further consolidation, though concerns were raised about “regulatory overkill“. Mark Hodges, Chief Executive of Aviva UK, stated that “There is a fear in the insurance sector that we’re being swept along on a tide of banking regulation, so we’re advocating proportionality and recognition of the difference between banks and insurers“. Tim Breedon, Chief Executive of Legal & General, noted that “Insurers aren’t banks“.
