The first quarter of the year saw a rise in profitability in the financial services sector, according to a recent survey conducted by PwC and the Confederation of British Industry. Although the pace of growth had slowed somewhat, the overall volumes of business continued to increase, with building societies showing a levelling off after a fall in the final quarter of 2014.
Commissions, fees, premiums and net interest saw a significant rise in the first quarter of 2015, along with investment and trading which also rose. This offset some of the increases in the cost to ensure a rise in profits which has been described as ‘robust’ by commentators. The trends suggest that most firms are planning to increase their spending when it comes to IT recruitment.
Most of this spending has been allocated to providing new services and increasing efficiency, with many companies reporting that they will be focussing their plans for growth on cross-selling to their existing customer base rather than engaging in the costly business of landing new ones. The overall feeling in the financial services sector is of optimism, with many firms reporting an upbeat attitude even in the face of the slight blips in growth that have been seen in some specific areas such as banking.
Many institutions have been re-evaluating the focus of their activity as they fall in line with new regulations and capital rules will mean a change in the way they need to work. However, banks in the UK are still showing increasing confidence, with a growth in revenue and an increase in profitability. There is also a generally positive feeling about credit risk, with a belief amongst industry experts that the value of non-performing loans will remain relatively low in the coming months, a period during which interest rates are not expected to rise either.
Banks have also confirmed that their spending priorities will be on improving their IT infrastructure and improving their cyber-security as well as spending on improving and innovating when it comes to their digital platforms in order to provide their customers with the services they want.
This all means that there are likely to be a number of opportunities for contractors in the sector in the coming months, particularly those with experience in IT and finance, as around 72 per cent of companies are planning to invest in their IT systems. For independent professionals with the skills that will be sought-after to help achieve these goals, there could be a significant rise in recruitment and the rates that they can command.
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