Cost of regulatory compliance 'should be reduced'

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Financial sector firms want to see a reduction in costs

Businesses across the UK financial sector would be in favour of measures to reduce the cost of regulatory compliance, a new report from the Confederation of British Industry (CBI) has revealed.

The CBI/PwC Financial Services Survey for the second quarter of 2015 showed that while a balance of +32 per cent of financial operators across the country are optimistic about their overall business situation for the coming three months, there has been a considerable reduction from the +50 per cent balance that was recorded in Q1.

When asked about the chief concerns facing their organisation at present, company leaders cited three major issues they would like to see the government address as a priority in the months ahead:

  1. Ensuring tax stability for the financial sector.
  2. A reduction in the cost of regulatory compliance.
  3. Enhanced financial literacy among both households and businesses.

As a result, it is hoped that the chancellor's upcoming summer Budget announcement will target at least some of these areas, with businesses across the spectrum of financial services presently less positive about the future of their industry than they have been for some time.

CBI director of economics Rain Newton-Smith commented: "Demand for financial services continues to strengthen, with profits holding up and employment showing signs of an improving trend.

"But the cost of regulation and tax uncertainty are a top concern for firms across the sector. They want to see the government focus on keeping the UK a competitive financial centre by not putting UK firms at a disadvantage."

Indeed, with ongoing uncertainty surrounding the short-term regulation for the industry, an upcoming referendum on membership of the EU and a general lack of confidence across European markets, UK financial services providers are calling for strong leadership from the government to address these concerns.