UK banks handling interest rates better than US counterparts – but are lagging on AI
UK financial services execs are coping better with the bleak market conditions compared to their US counterparts, according to a study by New York-listed Fidelity National Information Services (FIS).
While 91 per cent of financial services company executives in the US have expressed that soaring interest rates have been hampering their investments, only 78 per cent of those in the UK said the same.
“This could be in part because the UK financial services sector is nimbler and more resilient to shocks, particularly given the current government’s efforts to stabilize conditions,” said Himal Makwana, head of platforms, strategy, operations and venture at FIS.
The financial industry on both sides of the Atlantic is grappling with inflation. In the UK, rates are at 7.9 per cent, compared to just three per cent in the US.
UK inflation also peaked higher at 11.1 per cent in September 2022, four months after the US peak at 9.1 per cent in June last year.
Unlike financial services, consumers in both countries showed similar levels of concern, with 76 per cent in the UK and 77 per cent in the US saying the sky-high interest rates have impacted or will impact their financial decisions.
As consumers worry about the economy, “businesses are exploring how they can build trust with existing and potential new clients,” Makwana added.
“Many of the executives we surveyed plan to do so with future-looking technology, such as embeddable financial services using APIs, blockchain and generative AI, to deliver advanced customer experiences.”
However, only 36 per cent of UK banks are investing in generative AI, compared to 48 per cent of US banks.
Fintech company FIS surveyed 4,000 consumers and 800 financial service firm executives in the US and UK.