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CBI/PwC Financial Services Survey

Q3 2021 Results


In tune with change

What customers and wider society expect from financial services (FS) is changing fast, from an ultra-intuitive digital experience to helping to create a greener and more socially inclusive economy. The front-runners are building on their new digital capabilities to get closer to customers, understand their changing expectations and respond with agility, ingenuity and speed.

“A combination of the pace of modernisation and financial services’ key role in driving social and environmental change has brought the industry to a fresh inflection point. Success demands a fully customer-centric vision for the future. The big risk is trying to revert to pre-pandemic norms that are no longer viable or relevant.”

Isabelle Jenkins Leader of Financial Services, PwC UK

Rebound gathers momentum

What the results say

  • Optimism continues to grow across financial services as organisations anticipate another significant rise in business volumes and returns over the coming months.

  • Non-performing loans (NPL) rates are expected to fall in the next quarter, allaying fears of a rise in defaults following withdrawal of government job retention support.

  • Headcount grows in most FS sectors with employment expected to grow further in the next quarter to December.


Optimism, volumes and returns all remain strong and the outlook for the coming quarter continues to be positive. The anticipated fall in NPL rates is especially encouraging, underlining banks’ confidence in the economic recovery and the resilience of their customers.

But the survey also highlights challenges ahead. These include the tightening of spreads, which reflects intense competition in key markets such as mortgages and the need to control costs to sustain returns. While headcount is down in the sector, competition for expertise in areas such as ESG continues to mount.

“Banks are moving forward – improving revenues, accelerating digitisation and generating more positive public perceptions. The return on investment in transformation is beginning to show. A continued focus on customer outcomes and key sources of differentiation will help target investment more effectively and drive long-term value creation.”

Mark Batten, Leader of Banking and Capital Markets, PwC UK


Insurers’ confidence about rises in business volumes and returns in the period ahead is the strongest of our FS sectors. Significant investment in new technology is paying off in terms of improved agility and cost-efficiency.

But insurers recognise the challenges ahead in sustaining this standout performance. In particular, they’re the most likely to point to the disruptive impact of changes in regulation. Pressing developments range from the pricing review to IFRS 17. Many also highlight the difficulties they face in keeping pace with stakeholder expectations on ESG.

As both ESG and the balance sheet impact of IFRS 17 come under increasing stakeholder scrutiny, pressure on both talent and technology is intensifying.

*Results in the above graphic relate to General Insurance

“The survey highlights the generally buoyant mood within the insurance sector as returns strengthen and transformation gathers pace. Forward-looking insurers are harnessing the step-up in customer insight and operational agility to develop more innovative, responsive and cost-efficient solutions. They are also moving forward on ESG. Slower moving competitors risk losing out on cost, talent and relevance.”

Alex Bertolotti, Leader of Insurance PwC UK

Investment Management

Rises in business volumes and returns have flattened in Q3 following the strong gains in the first half of 2021. However, investment managers expect both to pick up significantly during the coming quarter. 

ESG is at the forefront of the agenda. But investment managers report that progress continues to be held back by lack of data and appropriate systems. This creates a potential risk of failing to live up to promises on ESG and being called out for possible ‘greenwashing’.

ESG is heightening an already exacting regulatory agenda. Prominent challenges include meeting the demands of the revised stewardship code. The code not only highlights the need for increased monitoring, evaluation and assurance, but also the importance of embedding ESG into investment decision making.

“As the latest survey highlights, investment managers recognise their changing role within society and critical importance in delivering the ESG agenda. But delivery continues to be hampered by constraints on resources, lack of data and difficulties in tracking progress against objectives. Targeted systems investment would help free up resources and sharpen analytics and insight.”

Elizabeth Stone, Leader of Asset and Wealth Management, PwC UK

Priorities ahead

  • Continue to accelerate the pace of digitisation and automation to reduce costs and free up talent to focus on innovation and customer solutions.
  • Even with increased salaries to attract talent, demand for people with scarce skills, including ESG, can’t be met by hiring alone. Upskilling within the existing workforce is therefore critical, both in bridging talent gaps in the short-term, and embedding an ESG mindset and digital proficiency within the organisation for the long run.

Realising the return on digital investment

What the results say

  • Almost a third of FS organisations are now realising the benefits from their investment in modernising technology (31%), compared to less than 15% a year ago.

  • Almost 90% expect to automate standardised or repetitive tasks over the next five years in response to digitisation and new technologies.

After the slow and tentative modernisation that followed the financial crisis, FS organisations have regained their ability to move at pace.

Technology is boosting competitive advantage for many FS organisations as a growing number reach the ‘benefits realisation’ stage of their investment in digital. The benefits for the front-runners don’t just include lower costs, but also being more closely in tune with customer and wider stakeholder demands. 

The challenges ahead include how to target resources where they can deliver the greatest value creation and how to translate the investment into a real boost in shareholder value.



Technological implementation has advanced quickly, though retail is ahead of corporate banking.

The survey highlights the extent to which banks are looking beyond the automation of routine tasks towards taking tech-enabled capabilities to the next level, particularly in areas such as customer engagement and insight. Nearly all the banks in our survey (97%) expect greater collaboration between humans and machines over the next five years, more than any other FS sector.

As more operations are automated, many banks believe that the real differentiator will be the human capabilities that cannot be replicated by machines. Over 70% anticipate greater demand for creativity and emotional intelligence in response to digitisation and new technologies.


Nearly 40% of insurers are now realising the benefits from their investment in modernising technology.

The nimble, digitally-enabled front rank has opened up a significant lead over a trailing pack that is still at the planning and transition stages. The competitive advantages don’t just include lower premiums and faster and easier claims, but also more responsive and customised cover.

As market developments in areas such as sensor tracking and pay-as-you-use insurance gather pace, the ability to move quickly in response to changing customer demands will be even more of a differentiator.

Investment Management

The acceleration in digital transformation is reflected in the fact that more than 60% of investment managers in our survey have either implemented new technology systems across their business or moved on from there to realise the benefits.

However, the potential for further gains is significant. With demands on key skills in areas ranging from ESG to private markets increasing, further automation could help to free up and make better use of talent time.

Priorities ahead

  • Accelerate the shift from ‘product push’ to customised financial solutions. Technology has now made this possible. But it also calls for a genuinely customer-centric vision for the future.

  • Develop a clear transformation strategy that tackles legacy, while concentrating resources on areas where the business has the ‘right to win’. The results would help to boost value creation and growth.

  • Identify the opportunities and threats from changing customer expectations and the next wave of FS innovation in areas such as hyper-personalisation, dynamic pricing and embedded finance.

  • Adopt a disciplined value creation lens that identifies the specific talent, technology and FinTech partnerships needed to deliver strategic goals, and build both acquisition and organic investment around this.

Keeping pace with change

What the results say

  • In the wake of the COVID-19 pandemic, 42% of FS organisations have made significant changes to their products and services to ensure suitability for different types of customers. A further 29% are reviewing the suitability of their offering with a view to implementing changes.

  • Nearly seven in ten (68%) cite changes in customer preferences and behaviour as a key disruptive trend.

  • Over six in ten (61%) are offering new products and services in response to disruptive shifts in customer demand.

The growing trend to make ongoing changes to products and services shows that FS organisations are recognising the importance of being in tune with customers and building affinity. 

Insight and agility is key to keeping pace with changing customer needs and staying relevant in today’s market. For many FS organisations, accelerating the move to cloud is strengthening speed and scalability, while digitally-enabled profiling is enabling them to develop a clearer understanding of individual customer needs and adapt products and services to suit.

Over 70% have made, or are considering changes, to their products and services to ensure suitability for different types of customers in the wake of the COVID-19 pandemic. This demonstrates a real drive to recognise different types of customers and do the right thing to support their differing needs.

Priorities ahead

  • Develop the ability to test, learn and adjust at speed: Just like Big Tech businesses, the nimblest FS organisations are able to bring innovations to market quickly and tweak products and services continuously in response to feedback and customer needs.
  • Develop effective change and risk management: The starting point for boosting speed and agility is moving multiple systems onto a modernised, scalable and easy to plug-and-play cloud platform. But transformation plans should take full account of the heightened cyber risks and potential for operational disruption.

Changing role within society

What the results say

  • More than eight in ten of FS organisations believe they have a significantly (44%) or moderately (42%) increased role to play in supporting society more broadly since the COVID-19 pandemic.

  • Around eight in ten cite diversity and inclusion and corporate social responsibility and/or progressing a meaningful role in wider society as priorities within their ESG agenda.
  • Seven in ten believe that public perceptions of the FS industry has significantly (10%) or moderately (60%) improved as a result of the pandemic.

The majority of FS organisations believe that public perception of the industry has improved through the COVID-19 pandemic and that it now has an increased role to play in supporting society more broadly. This marks a turning point for the industry to progress a meaningful role in society and become more purpose-driven.

In the short-term, this includes being at the forefront of driving economic recovery, while helping to deliver key ESG priorities including levelling up and the transition to Net Zero in the longer term.


Banking is where the shift in public perception is most marked – more than 90% of banks in our survey believe it’s improved. The same can be said for the recognition of the sector’s increased role in supporting society more broadly.

Yet banks are also keenly aware that turning intentions into actions on ESG is a complex challenge. Chief among the barriers they cite are lack of clarity over objectives and constraints on internal resources.

Underlying issues include a lack of consensus on what ‘doing the right thing’ involves. For example, should banks be withholding finance from fossil fuel companies or do they have a responsibility to actively support them in their shift to sustainable generation. This underlines the importance of a clear and well communicated strategy, supported by the expert talent and organisational embedding of that strategy to deliver on ESG objectives.


More than 90% of insurers recognise their increased role in supporting society. ESG is at the centre of this step change. 

However, around 40% point to the difficulties in delivering their ESG agenda as a result of a lack of data and/or clarity over objectives. This is a recurring theme and needs to be addressed if insurers are to meet stakeholder expectations.

Investment Management

Investment management’s pivotal role in delivering society’s priorities is clear, from investing in infrastructure and job creation within deprived communities to helping to fund green innovation and transition within portfolio companies. Accordingly, more than 70% cite embedding ESG within their business as a key part of their transformation strategy.

Living up to these expectations demands more effective data and governance. Just as important is a change in how the sector projects itself. Having largely operated away from the public eye in the past, investment managers may now need to put their heads above the parapet and engage more closely with communities and policymakers.

Priorities ahead

  • Understand the shifts in public perception and increased societal responsibilities. These represent a turning point for FS as the industry moves towards a purpose-driven, customer-centric vision. The enablers are a clear understanding of customer expectations and the engagement, data and analytics to deliver on this mission.

  • Look at the big picture: The evolution of FS business models doesn’t just relate to narrow financial criteria, but also what this means for their workforce, their role within society and how they judge performance and success.

  • Determine how customer and wider stakeholder priorities have changed in the wake of the pandemic. Techniques such as zero-based budget analysis can support this. The results can help to judge which services are still (or more) relevant in this new world on the one side, or no longer relevant and hence can be switched off on the other. Starting with this clean sheet will help to target resources more effectively and avoid simply reverting to pre-crisis norms.

Thinking about digital currency

What the results say

  • Half of FS businesses are not prepared for central bank issued digital currencies becoming mainstream.
  • Only 5% report that they have a comprehensive strategy in place and most of these are securities traders or stockbrokers.

A central bank digital currency in the UK is still some way off. While the Bank of England and HM Treasury have set up a joint taskforce, they have yet to make a firm decision on introduction. But it’s conceivable that other central banks could move in this direction soon, especially if they believe this offers a more regulated alternative to the current status quo.

Priorities ahead

  • Factor future developments into your current technology plans, even though a Bank of England digital currency might not seem imminent.


Contact us

Isabelle Jenkins

Isabelle Jenkins

Leader of Industry for Financial Services, PwC United Kingdom

Tel: +44 (0)7711 773030

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