‘Banking sector over-regulated’

Over-regulation, a shortage of talent, and technology are the biggest threats to growth in the banking sector, according to a global survey of bank CEOs.

While nearly all of the CEOs surveyed by PricewaterhouseCoopers (PwC) felt that the revenues at their banks would continue to increase over the next three years, many felt that the industry was over-regulated.

PwC surveyed 133 banking CEOs across the world and found that 56% of them believed that economy will improve in 2014 compared with only 19% last year.

The confidence expressed by the CEOs is mirrored in the intention of more than half of those surveyed to increase employee numbers.

However, more than 60% of the respondents said that limited availability of talent continues to be a concern.

Financial Services Partner with PwC Ireland Ciaran Kelly said that the biggest issue that banking CEOs highlighted in the survey was over-regulation.

“Eighty per cent of global banking and capital markets CEOs continue to believe that too much regulation is impeding growth. The regulatory overhead is a new norm that the banking industry needs to take account of in the new banking environment,” he said.

The knock-on effect of dealing with the new regulatory regimes is the banks are not in a position to capitalise on emerging technologies.

The majority of the CEOs believe that the banking sector will be transformed by a flood of new technologies and customer behaviours that will change the banking landscape.

“Industry leaders see technology, including the digital economy, social media, mobile devices, big data and other developments, as likely to transform their businesses over the next five years.

However, most CEOs say they have yet to set in train initiatives to capitalise on these transformational trends in the key areas of talent, technology, distribution, data analytics, and innovation capacity.