According to the CBI/PwC financial services survey, the asset and wealth management industry has seen its first significant fall in confidence since the winter of 2011 amid volatile markets.
The survey found that the decline in confidence was largely due to continued difficult markets, political uncertainty and a drop in profitability at the beginning of 2016.
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The fall profitability has led to a decline in prioritising new product launches and M&A, and more focus on core activities such as customer retention and strategic partnerships.
According to the latest CBI/PwC Financial Services survey, asset and wealth managers were lagging behind the wider financial services (FS) industry relating to anticipating and planning for cyber threats.
The survey reveals three key areas where asset and wealth managers are falling behind the FS industry including strategies for penetration testing, incident response mechanism testing and collaboration with partners against cyber threats.
PwC asset and wealth management leader Mark Pugh said: "There has been a notable fall in confidence amongst asset and wealth managers during the last quarter, with the current global market turmoil having had an inevitable knock-on effect on confidence. And as companies begin to feel a real squeeze on margins, we are seeing a clear focus on both cost and competition."
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By GlobalData"A continued investment in marketing shows certain organisations are holding their nerve and continuing to invest for the future. However, companies will be asking themselves how much longer they can maintain this position and when they may need to consider retrenching and looking to further cost cutting.
"Senior executives are having to take ownership of cyber strategy and investment in preventative testing and technology needs to be a priority. This is tough in such difficult markets but the reputational and economic risks are too large to be ignored."
