High growth expectations among financial executives at a time of economic uncertainty, new research: SIX

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

The Future of Finance global study, of C-level executives at 300 international financial institutions, found that more than two-thirds of companies expect the economic outlook to improve in the next 12 months, and an even higher number (over 70%) believes inflation would slow by the end of 2023. Additionally, more than 90% of executives believe their organization is positioned for strong or moderate growth over the next three years.

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.

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.

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.

“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,” said SIX CEO Jos Dijsselhof. “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.”

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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