More than half of senior managers and executives surveyed by the Luxembourg Financial Services Industry are concerned about the effects of digital disruption in the financial industry.
The agency surveyed approximately 350 managers and C-suite executives last month, and it has revealed that 57 percent of respondents did not believe regulation was keeping pace with increasing digitalisation trends across the financial services sector.
It also revealed that 69 percent of the investment leaders it questioned revealed “moderate”, “strong” or “extreme” concern about the possible shift of e-commerce platforms towards distributing financial products within the next two to five years.
Alongside anxieties of advancements in technology, climate change emerged as a leading concern with 60 percent revealing some level of apprehension about the ability of their organisations to deal with the issue.
However, there was also a bullishness about the capability of businesses to adapt from developments in sustainable finance regulations. The survey revealed that 81 percent are confident about their organisation’s ability to handle changes related to sustainable finance regulation emerging from Brussels over the next two to five years. This confidence among decision makers in dealing with the changing regulatory landscape for sustainable finance is underpinned by the significant investment they plan to make in upskilling employees.
Currently, 84 percent expect to provide sustainable finance training over the next two-to-five years, with 38 percent expecting to “significantly upskill” their workforce.
This positive perspective on the possibilities of businesses to adapt was shared on broader questions. On the whole, 50 percent of respondents believe the global financial services industry to be resilient in the medium term. This represents an increase of seven percent compared to October 2020. Only 24 percent still see the market environment becoming more volatile and only 23 percent expect major risks and disruptions ahead.
As a consequence, navigating the risks associated with geopolitics, economic uncertainty and climate change are the primary concerns of the senior leaders in the financial services industry over the next 12-24 months. Covid-related bankruptcies are seen as a less pressing risk, having been priced in to a large degree. The respondents seem to support the idea of a resilient period of adaptation with longer-term trends such as digitisation instead capturing their attention.
Nicolas Mackel, chief executive of Luxembourg for Finance, said: “While the financial industry still faces numerous uncertainties and challenges, cautious optimism can be perceived and this is very encouraging.
"Financial services can be a tremendous force for good as the world recovers from the pandemic and attempts to build back better. So the commitment financial leaders show towards meeting their sustainable finance obligations, such as training their staff, will make a huge difference in how economies and societies function in the future.”