Will 2024 Be a Tough Year for The Financial Services Sector?
Andy Nicol
2023 was supposed to be the year that business moved on from the pandemic...
It was all meant to be behind us, with everyone looking forward with renewed optimism and a return to where we were pre-2020, and for some this was the case - Big Tech just got bigger!
But for many sectors, 2023 proved to be a struggle, with challenges still present from the pandemic and many companies still wrestling with the hybrid working dilemma. Financial Services were very much in this camp, unable to resolve a number of key cultural challenges:
- "Do we allow staff to continue to work from home?"
- "How many days in the office is optimum?"
- "Is productivity as good as it was?"
Many Financial Service leaders were asking these questions, but here’s the kicker; everyone had a different answer!
There was no agreed consensus, just arguments that three days in the office is best or that everyone must work a Monday or a Friday every second week etc.
Myself and ABSTRACT don’t expect this uncertainty to change as we head further into 2024; and here’s why...
Challenges The Financial Sector Faces in 2024
Global Economic Outlook:
Economic conditions and geopolitical events can (and will) continue to influence financial markets and investor sentiment.
Factors such as economic growth, inflation, interest rates, trade tensions and geopolitical conflicts will continue to shape the investment landscape and impact asset prices.
Add to this the additional uncertainty caused by elections on the cards in the UK and USA this year, with a full change in Government highly probable in both cases.
Technological Innovation:
The Financial Sector will likely continue to be shaped by advancements in technology including the rise of fintech companies, blockchain technology, AI and digital currencies. The World Economic Forum, for example, expects that 10% of global GDP could be tokenized and stored on the blockchain by 2027!
These innovations have the potential to disrupt traditional banking and investment practices, leading to changes in how Financial Services are delivered and consumed across the world.
Sustainable Finance:
There is a growing emphasis on environmental, social and governance (ESG) factors in investment decision-making.
Investors are increasingly integrating ESG criteria into their portfolios and demanding greater transparency and accountability from companies. This trend is expected to continue as stakeholders place greater importance on sustainability and responsible investing.
With this backdrop, it could be a tough year in Financial Services, meaning people need to work smarter not harder.
Every pound or dollar will need to be invested carefully and ensure that there is a suitable return on that investment. This is a tough environment for Learning and Development to operate within. Mandatory training will continue of course because it is mandatory.
Decisions will need to be made by companies concerning how much they invest in the development of their staff, given the macro-economic conditions they find themselves in.
It is important to note that this aspect of development comes from discretionary spend budgets;
it is not regulatory training, and with this spend already having diminished in 2023, it will take brave decisions from truly pioneering leadership
to increase personal investment for their people this year.
ABSTRACT's Opinion
Building a successful ‘People Strategy’ in 2024, fully understanding and appraising the likely return-on-investment is key.
“If I spend £100k on a training budget, what positive effect will that have on my business?”
This is a question ABSTRACT will be able to answer, through our distinguished track record as the learning partners to leading global FTSE 100 companies.
