An international survey of banking and capital markets CEOs, carried out by PwC, shines some light on the challenges facing banking globally. The challenges come under three broad headings - technology, risk and regulation.
Ronan Doyle, PwC's Banking leader in Ireland, explained that the survey was a subset of a global survey of CEOs over a number of industries. "The ability of technology to disrupt is the number one concern of banking CEOs, much higher than those in other areas where you would expect it. The CEOs are seeing it both as an opportunity and a challenge. The opportunity allows the ability to redefine business models. The challenge is the new risk it brings, with cyber probably being the biggest at the moment," he said.
Regulation also emerged as one of the biggest challenges facing the banking sector with a combination of factors contributing. "This is a global study reflecting a number of different regimes. Regulation is stabilising somewhat and CEOs are now embedding that regulation in their systems and are coping with how to deal with they various regulators in the markets in which they operate," Mr Doyle explained.
He said a concentration on cost cutting and consolidation could be an opportunity for Ireland in that a number of respondents operate in financial centres like London and New York which have higher cost bases.
Geopolitical uncertainty was also identified as a factor that could weigh on sentiment for the foreseeable future, the most immediate for the Irish market being a potential British exit from the European Union. "The survey pre-dated the Brexit debate, but looking at currency markets and even in the way the bookies are reporting, clearly Brexit is front and centre. A number of CEOs are talking to us about contingency and scenario planning that they should be doing," Mr Doyle concluded.
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MORNING BRIEFS - Employers' group Ibec has warned of uncertainty from growing economic headwinds in the coming months which could potentially impact on the recovery in growth here. A British exit from the European Union is the biggest threat it identifies which is already creating a major competitiveness risk for Irish exporters into the UK. Ibec says the mere threat of 'Brexit' has been enough to precipitate a serious drop in the value of sterling and that a vote to leave would prompt a further significant depreciation. The group also warns of the dangers of a global economic slowdown, the pressures of wage growth at home and housing constraints. It is pencilling in GDP growth of 4.6% for this year - down substantially on the near 8% growth last year.
*** Wholesale gas prices were over 40% lower here in March compared to the same month last year. Gas prices are now at their lowest level since April 2010, according to the monthly market report from Vayu Energy. Oversupply and a relatively strong euro since the start of the year are behind the weakness in gas prices at the moment. That price weakness should persist in the medium term.
