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For the first time in many years we've seen new technology and new products in the industry become a priority. At the same time confidence is muted in the sector with a lot more pessimism compared to a year ago. This is in part due to expectations for a further decrease in headcount, restrictions on the amount of investment and continued focus on regulation.
Business volumes are expected to remain steady in the next quarter as firms look to invest in new services to cross sell to existing customers and to reach new customers in this increasingly competitive market. Despite this, financial services firms reported healthy growth in profitability, underpinned by tight cost control.
Looking ahead, weaker business volumes growth, flat income and rising costs are expected to push down on profit growth in the quarter to March.