70% of finance executives predict growth and a slowdown in inflation by the end of 2023, a new study suggests

Financial institutions are bullish on growth despite growing fears of a global recession, according to new research from Swiss and Spanish stock trader SIX.

global Study of the future of financeof C-level executives at 300 international financial institutions, found that more than two-thirds of companies expect the economic outlook to improve over the next 12 months, and an even larger number (over 70%) believe inflation will slow as end of 2023.

In addition, more than 90% of executives believe that their organization is positioned for strong or moderate growth in the next three years.

Figure 1: Respondents asked how strongly they expect their organization to be positioned to grow in the next 3 years in the face of rising inflation and high interest rates

Overall, respondents from investment banks had the most positive view of their growth prospects, followed by those from retail banks and asset managers.

Wealth managers and asset services companies sit at the other end of the spectrum, but it’s worth noting that in each of the sectors surveyed, at least three-quarters of respondents expect strong or moderate growth.

New business models and digitization to boost efficiency

As for what drives the growth expectation, the adoption of new business models is one of the most common reasons, as well as the internal efficiency savings generated by digitization.

Advanced data and analytics are also recognized as a major driver of potential business expansion, as opportunities to use new insights to generate returns become increasingly attractive.

The remaining engine for growth is new and alternative asset classes, including crypto. Confidence in the ability of non-traditional assets to deliver growth is highest among asset managers, asset services, and retail and investment banks.

digitization

Geopolitics, the biggest challenge

Despite generally optimistic expectations, the potential for geopolitical uncertainties to impede or slow growth was one of the most widely recognized challenges among respondents.

A quarter of respondents (25%) see geopolitics as the biggest obstacle in their path to growth.

SIX CEO Jos Dijsselhof said: “During this period of declining GDP and rising inflation, a return to more prosperous times may seem like a lifetime away, but all recessions are ultimately temporary.

“The difference is that the current recession, unlike previous ones, is underpinned by transformational factors that give financial executives the confidence to see future growth through the fog of recession.

“Crypto and digital assets are here to stay and the industry has only scratched the surface of the return opportunity that can be derived from the use of data and analytics. It is for these reasons that executives are ultimately optimistic about the future of finance.”

Biggest drivers, biggest challenges

The full study on the future of finance, made up of four chapters covering growth, sustainability, skills and technology, is available here.

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