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Financial Services Sector Experiences Slow Rise in Profitability LONDON, Jan. 8, 2001 (AccountancyMagazine.com) Profitability in the financial service sector has risen more slowly than expected, and a lack of understanding has hindered the development of e-business, according to the latest quarterly Financial Services Survey by the Confederation of British Industry and PricewaterhouseCoopers. Although 45 percent of firms said that business volumes had increased (only 15 percent said volumes were down), profitability rose at a much slower rate than was either reported or expected in the previous survey. Securities houses reported a sharp fall in profitability, and most sectors expect a fall over the coming three months, consistent with a squeeze on margins. The survey also showed that although 27 percent of firms said that the value of Internet business had risen over the last three months, 23 percent of those firms said that the increase was slower than expected, versus 13 percent that said it was faster. CBI associate director of economic analysis Sudhir Janankar attributed the lack of speed to "a lack of understanding among customer and suppliers" and "concerns about the lack of security standards, the speed of the Internet, as well as the availability of professional staff." Send comments to information@smartpros.com. Copyright 2001 AccountancyMagazine.com. Used with permission. |
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