UK finance bosses have ‘markedly’ different expectations to global peers

Looking ahead to 2016, UK banking chief executives expect an increase in cyber-attacks, headcount reductions, and tougher expectations from stakeholders over banking transparency, according to a survey from PwC.

While almost four out of 10 (36 per cent) banking and capital markets leaders were particularly concerned about cyber threats in the coming year, just 28 per cent of UK CEOs across all sectors shared the same concerns compared with 21 per cent of CEOs globally.

More than 1,400 executives in 83 countries were asked what was on their agenda for the coming year in PwC’s 19th Annual Global CEO survey. It revealed that two-thirds of UK business leaders are planning to increase their organisation’s headcount in 2016, but only 43 per cent of banking chiefs expected greater recruitment to the sector.

Instead, nearly a third (29 per cent) of UK bank leaders surveyed said they expected headcount to decrease over the next 12 months, compared to 21 per cent of global CEOs.

And 92 per cent of all UK CEOs said people were their top priority for 2016, with banking chiefs also “actively investing in their talent strategies to attract, retain and engage people they need to remain relevant and competitive,” the report said.

Changing the pay incentives and benefits employers provide to the workforce seems to be the most effective way to achieve this. According to the survey, 40 per cent of UK CEOs across all sectors and 33 per cent of global leaders opted for this approach, compared to a third (32 per cent) of banking leaders in the UK.

Simon Hunt, UK banking and capital markets leader at PwC, said that significant cost pressures on the finance sector could be the reason why not all banking chiefs are choosing to increase pay and reward.

“These findings show that UK banking leaders are not only taking the threats stemming from economic pressures, regulation and reputational risk management seriously- but that newer risks, for example cyber, are very much on their radar,” he said.

The global survey suggests that some of the expectations of UK banking CEOs differ greatly from chief executives elsewhere in the world, and that the UK financial sector is still feeling the pressure of the economic crisis and recent banking scandals.

Regulation continues to be costly and complex, according to the global survey. Nearly nine out of 10 (87 per cent) banking and capital market leaders see over-regulation as a threat to growth.

While 6 per cent of all CEOs across the UK plan to respond to increasing stakeholder expectations by making significant changes to how they manage their tax affairs, that figure rises to 18 per cent of UK banking respondents, because of the desire for greater transparency in the sector, the Global CEO Survey found.

To meet the requirements, 95 per cent of UK CEOs said they would exploit technology to deliver wider stakeholder expectations.

“A combination of technology, outsourcing and centralised centres of excellence will be at the heart of the leaner and more streamlined approach to compliance that emerges,” the report said.