Financial futures: Disruption in global financial services

In Europe, the financial services sector is feeling the pressure while navigating an evolving regulatory landscape, regional economic challenges, and unique consumer expectations.

Increasing regulatory scrutiny around ESG commitments and the rapid pace of technological change is particularly evident in Europe, where digital banking adoption rates are soaring and AI-driven solutions are transforming the sector. However, regulatory frameworks around data privacy, such as GDPR, present a distinctive challenge as firms implement Big Data and AI while remaining compliant. This nuanced interplay of regulation, innovation, and regional economic factors places Europe at the forefront of transformation in the financial services sector, adding both opportunities and challenges that differ markedly from other global regions.

In the present moment, these themes are major disruptors to the status quo. Amid this landscape, DLA Piper commissioned a global survey of c.800 major decision-makers (of which over 50% were based in Europe) in financial services to explore the impact this change is having on the sector.

• The majority of financial services decision makers in Europe (82%) are optimistic about the outlook for the next 1-2 years, which is in line with the global average of 80%.
• Among organisation types, banks are most optimistic globally (88%).

• Overall, more than 80% of financial services organisations in the Netherlands believe that it’s “the new normal” for ESG concerns to be a core driver of the industry.
• More than 60% of organisations see "opportunities to benefit our environment and communities" as a driver for engaging in ESG activity.
• But firms are also overwhelmed by the ESG demands, with more than half of respondents describing the ESG as one of their biggest challenges.
• Firms are worrying most about reputational risk as a result of ineffective ESG positioning, the challenges related to creating sustainable products, regulatory complexity and the integration of ESG throughout the business.

• Respondents in the sector, in the Netherlands believe that digitalisation (42%) and AI (68%) will have a transformative effect on financial services over the next two years.
• More than half (68%) of respondents in the Netherlands view "ethical use of AI" as a key challenge for the sector over the coming two years.