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March 3, 2024
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What will shape finance this year?


When ChatGPT burst into the public consciousness in early 2023, financial services firms initially reacted by banning their employees from using it.

A year later, many executives are heralding generative AI as transformative for their business. AI as a key theme for 2024 may seem obvious. But what are the other trends that will affect the industry this year?

Bob Diamond, ex-Barclays boss and CEO of Atlas Merchant Capital

“2024 will be defined by the US presidential election, which likely won’t be decided on economic issues. Having said that, the biggest unresolved issue in terms of financial services specifically is going to be how regulators choose to finalise Basel III and what that portends for the future of US banking. Does the US want four large banks that are regulated as utilities (as in Europe), with private credit taking more and more market share? Or does it want thousands of small- and medium-sized banks specialising and supporting different regions and sectors safely and efficiently?”

Stefan Hoops, CEO of DWS

“Digitisation will be one of the defining trends of the asset management industry. While cryptocurrencies currently dominate the digital assets space — and we remain cautious on these — we recognise the growing acceptance among retail and institutional investors of this asset class, as well as their importance to the tokenisation of assets.

READ Pension funds have gone ‘radio silent’ on crypto

“Asset managers will have a key role in bridging the gap between the traditional and digital finance ecosystems by bringing traditional assets onto the blockchain and enabling investors to tap into the vast potential of digital assets.”

Charles Adams, global managing partner, Clifford Chance

“Generative AI will be at the front of most people’s minds. Just look at the progress ChatGPT has made since it was launched. If this pace of progress continues, how we regulate generative AI — either country by country or adopting globally accepted standards and norms — will be key.”

David Hunt, CEO, PGIM

“A major theme playing out around the world is the changing role of private alternatives in a portfolio. For much of the past 20 years, there’s been an increasing allocation to privates, dominated by private equity. But following the global financial crisis, banks have been pulling out of funding many developed market economies and leaving that private credit funding to investors. This trend has a long way to run and CIOs will increasingly find new asset classes in private credit that are attractive for risk and diversification.”

Clare Woodman, head of Emea, Morgan Stanley

“We believe generative AI is exciting and could transform how we live and work. While in time we expect to see significant potential in the revenue and cost sides of the equation, most of the successful deployment in financial services has been centred on driving efficiency gains. Early adopters have focused on areas where it has the greatest ‘fit’ potential — where there is abundant information to interpret and synthesise, a need to generate moderately customised or creative content, and activities involve routine tasks.”

Farmida Bi, Emea chair, Norton Rose Fulbright

“In addition to the political environment, which could impact the deal pipeline as everyone waits for the results of elections, the energy transition and focus on generative AI will continue to be important trends.”

Ian Simm, CEO, Impax Asset Management

“We are particularly interested in AI’s potential to enable new and improved solutions to pressing environmental and social challenges — for example, improvements in energy efficiency for buildings and transport, predicting the physical impacts of climate change more robustly, and dramatically improving healthcare services and outcomes.”   

Bea Martin, president of Emea, UBS

“Digitalisation will likely be the most important trend, as we continue to see technology and digitalisation as a key growth driver for European capital markets, the development of AI and process automation, development and use of new digital infrastructure such as blockchain, tokenisation and decentralised finance, and positive developments to support strengthened cyber security.”

Klaas Knot, chair, Financial Stability Board

“Moves by ‘traditional’ banks and payment providers into crypto markets warrant close monitoring. This is particularly true for those providers with the potential to scale up quickly, including through tying to existing large customer networks.

READ US crypto regulation? It’s already too late

“Our global framework for regulating cryptoassets and stablecoins applies equally to traditional financial firms and other entities.”

Emmanuelle Bury-Lucas, UK head, BNP Paribas

“If I were to pick a single trend it would be decarbonisation: the need to build towards a sustainable economy just gets more and more pressing and it will impact everything we do for clients. We will also, globally, have to race to understand and leverage, in a controlled manner, the impact of AI, which is developing faster than regulation and commercial strategy can respond.”

Richard Houston, senior partner, CEO, Deloitte UK

“The shift to renewables — driven by social, economic and political imperatives — is a huge structural change, on par with the move from manufacturing to services in the 20th century. The UK government’s ambition is for all UK electricity to come from low‑carbon sources by 2035. This would mean pervasive change in the structure of the economy — change that in the past has been associated with productivity gain. Combine the energy transition with the enormous potential of new technologies and we could see energy transition helping deliver faster productivity growth.”

José Manuel Campa, chair, European Banking Authority

“Technological innovation is shaping our future. How we incorporate that technology into the financial industry will be key. At a global scale, the finance industry is witnessing a concerted effort to secure international collaboration in regulating innovative technologies.”

Nicolas Breteau, CEO, TP ICAP

“Interest rates remaining higher for longer and central banks reducing their balance sheets — we don’t know how this will play out. One thing for sure is there will be ups and downs. In a similar vein, it may prove considerably less straightforward than some observers think to squeeze out inflation from most major economies.”

Patrice Maffre, head of Emea investment banking, Nomura

“The rise in international tensions and full-blown conflicts continues to have a negative impact on the global economy and markets.”

Bidhi Bhoma, CEO, Liberum

“Declining inflation and the expectation that interest rates will eventually start falling will be the most important trend in 2024. The UK general election will also be important but the next government will have lack of options to radically reform the economic situation.”

Anna Anthony, UK financial services managing partner, EY

“Strengthening the UK’s competitiveness on the global stage will continue to be a key focus for the financial services industry in 2024. The UK remains a globally leading financial services market, but we can’t be complacent.”

To contact the author of this story with feedback or news, email FN Staff



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