Financial services technology company FIS has shown that UK banks are more resilient to turbulent market conditions than US banks in newly published research. The research is entitled `Financial Services Expectations vs Reality` and it aimed to explore how executives and clients are responding to the environment they live in, and the manner in which they are making their financial and investing decisions.

The research asked customers based in the UK and the US questions on their process of making personal financial decisions, as well as their expectations of the financial solution providers from their regions, such as their banks. It also focused on asking financial services company executives reciprocal questions, on how they are investing and innovating, what are their strategies, and what their plans are in reality. The results showed that financial products company executives in the UK have more resilience to market turbulence, compared to their UK counterparts.

This comes from the fact that the UK had experienced sharper rates of inflation recently, which are still significantly higher than those registered in the US.  According to the research provided by FIS, whereas the United States saw its peak of inflation at 9,1% in June 2022, the peak in the UK was registered in September 2022, at 11,1%. As of June 2023, the UK is still experiencing a higher rate of inflation, registered at 7,9%, compared to the recent drop in the US, which was registered as 3% in the same period. The research consisted of a survey of 4,000 customers and 800 company executives in the financial industry in the UK and the US, and it took place in May 2023.

More insights on the FIS research Businesses based in the UK are increasing investment at higher rates than in the US, while both are taking a broad-brush approach. In the UK, 78% of financial services company executives answered that high-interest rates are impacting their firm’s ability and possibility to innovate their products, as well as their capability to invest. The research also shows that nearly all the US-based executives (with a percentage of 91%) mentioned that they are also experiencing an impact from the high-interest rates of the region.

Customers in both of the areas showed concern over the high-interest rates, with a percentage of 76% and 77% mentioning that those changes will have or already have an impact on their financial decisions. The research published by the FIS also touched upon how UK-based financial services executives are currently investing in AI at a faster pace compared to the ones in the US. In the UK the percentage of investment in generative AI is 58%, while in the US the number is registered at 45%.

Additionally, 56% of UK executives mentioned that they plan to invest in artificial intelligence and machine learning technologies (ML) for process automation, compared to 51% in the US. Furthermore, large fintech companies in the UK aim to develop investment processes across the sector, with 75% of executives focusing on efforts to make their tools faster and more efficient. Moreover, many of the firms that were surveyed plan to build trust with new and already existing customers by incorporating improved solutions, such as embedded financial services using APIs or blockchain.

Clients mentioned that their top features are the all-in-one platform for managing their tools from providers, as well as the possibility to quickly set up or apply for more efficient and complex financial product transactions, like investments and loans. .