Lloyds: Financial firms expect growth in the next year

Financial institutions in the UK are showing resilience and a positive outlook, with more than half expecting growth in the year ahead, according to Lloyds Bank’s latest Financial Institutions Sentiment survey.

The report, based on feedback from over 100 senior leaders across banking, asset and wealth management, insurance and financial sponsors, found that 55% of firms anticipate business growth within 12 months. That figure rises to 83% when considering a five-year horizon.

A quarter of respondents expect further expansion across the financial services industry, while 58% believe their organisations will maintain current growth levels.

Strategic growth remains a priority. Nearly half (46%) of surveyed firms plan to deepen their presence in existing markets.

A further 42% are committing resources to emerging technologies such as artificial intelligence and automation, while 37% are focused on developing new products and services. For mortgage brokers, this wave of innovation presents both opportunity and risk. While brokers currently originate about 90% of new mortgage sales, their market share could be threatened. Industry leaders at a recent roundtable warned that advances in AI and shifting regulation may enable more borrowers to bypass intermediaries altogether.

Meanwhile, 37% of respondents in the Lloyds survey said they will increase capital expenditure over the next year. Key focus areas include digital transformation (47%), workforce development (46%) and AI applications (37%) — investments that could directly impact how products and services, including mortgages, are delivered to clients.

“This year’s survey paints a clear picture of a sector that is resilient, ambitious and ready to invest,” said Lisa Francis (pictured), head of institutional coverage at Lloyds. “Despite headwinds, financial institutions are continuing to focus on what matters: delivering for clients, investing in people and embracing new technologies.”

Long-term confidence remains solid, with 58% of institutions expecting UK economic growth over the next five years, and 56% projecting expansion within the financial services sector.

“There is a tangible sense of long-term opportunity, with the UK’s financial sector continuing to be well positioned to support sustainable growth and deliver great benefits for our clients and for the wider economy,” Francis added. 

The survey also underscored confidence in the UK’s global financial standing. Sixty percent of respondents believe the country will retain its status as an international financial hub. However, many noted that sustained investment and regulatory evolution will be key to maintaining this position — particularly as new technologies redefine the way financial services, including mortgage advice, are delivered.

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