Over-regulation and cyber-risk main banking and capital market threats, say chief executives

Tax and management consultancy PWC surveyed 175 banking and capital markets chief executives in 54 countries. Over-regulation was a concern for 89% of them, up from 80% last year, while 87% of chief executives thought that it would continue to have a disruptive effect in the next five years.

Cyber risk is the biggest threat to growth according to 79% of chief executives. And there was a significant jump in the number of executives who were worried by the threat of new market entrants – up from 32% last year to 53% this year.

Kevin Burrowes PwC’s UK financial services leader, said: "The ability to meet current and future regulation is hampered by lingering uncertainty over regulatory details and the potential for reactive and piecemeal implementation. It is vital for organisations to develop a proactive approach to regulation, headed by a regulatory leader responsible for liaising with regulators, assessing the strategic impact and co-ordinating the response."

New competition is likely to emerge from the technology sector (47%), communications (33%) and other financial services (31%), chief executives said.

In order to compete with these potential competitors, 93% of chief executives see mobile technologies as key, and 89% recognise the importance of their own role in championing digital technologies.

Data mining and analysis is important in both understanding customer needs and in driving operational efficiency, 89% of those surveyed said.

Ninety-two percent of the chief executives are optimistic about growth in their own organisations over the next three years, despite only 43% expecting to see global economic growth improving during the next 12 months – down from 56% in 2014.

The survey results suggested that there is a need to broaden the role of banking organisations beyond their traditional scope. More than 40% of chief executives are looking at joint ventures and informal collaborations as important, both for innovation and for accessing new customers and technologies.

A strategy to broaden diversity and inclusiveness is on the cards for 63%, to attract talent, enhance business performance, strengthen the organisation's brand, and to drive innovation.