Consulting » Financial directions – Financial services confidence plunges

Confidence crashes[QQ] Financial services firms have seen the biggest fall in business confidence for more than two years, despite rising business volumes, according to a CBI/PricewaterhouseCoopers survey. Sectors closest to equity markets such as securities traders and fund managers show a marked decline in optimism; those closest to the “real economy”, including general insurers, expect growth in profitability.

Customers key for banks

Effective customer relationship management is going to be a key driver of European M&As in the retail bank sector, argue KPMG Consulting and Goldman Sachs in a new report. If a typical bank’s customers are ranked by profitability, the top 20% generate 160% of the profits. “Only those banks that are exploiting their domestic customer base better than the competition will be in a sufficiently strong position to do cross-border deals in Europe,” they argue.

US rate cuts likely

The weakening US job market “suggests the door is wide open” for further cuts in US interest rates, claims Schroder Salomon Smith Barney. Manufacturers are rapidly reducing stocks, but that increases the likelihood of a near-term resumption in production, the firm argues.

CBI warns of slowdown

The CBI warned that the UK was facing a “sharp economic slowdown” because of foot-and-mouth disease and declining US activity. Its GDP forecast for the year has been cut from 2.5% to 2.0%. A day earlier, director-general Digby Jones said, “The word recession should stay right off the agenda.”

Cash is best investment

Cash was the best performing asset class for UK investors in the first quarter of 2001, slightly outperforming gilts. UK and world equities fell by more than 8%, with the FTSE-100 recording its fifth successive quarterly decline, reports Schroder Salomon Smith Barney.

UK pays promptly

UK companies are the second fastest in Europe for paying their bills, an average of 14.2 days late, says Dun & Bradstreet. The survey of 1.3 million companies found that a third of small companies (fewer than 50 employees) pay their bills early, compared to 11% of large companies (more than 250 employees).

PDAs face problems

There will be more handheld devices connected to the internet than PCs by 2003, says Gartner, but web solutions provider Information Builders has released a white paper highlighting two big challenges to mobile access technology. The first is the lack of standardisation of mobile devices, the second is their lack of processing and memory power.

IT staff are stressed

Half of front-line IT support staff feel they need stress management training, according to ICM Research and royalblue technologies.