Since the global financial crisis of 2008, profit margins in the UK’s banking sector have come under sustained pressure, with costs growing more quickly than revenues. Capital ratios in the sector have risen as regulators have sought to improve systemic resilience. Banks have found it tough to meet expectations for returns on equity, especially as investors have typically looked for returns in excess of 10%. The low- interest rate environment has added to their margin difficulties.
Today, these issues must be confronted in an environment where global trade disputes, Brexit and the low growth outlook are combining to create unprecedented uncertainty. At the same time, customers’ expectations are greater than ever: they want seamless banking that is integrated into their day-to-day lives.