Recent years have seen the financial services (FS) industry have to navigate the unprecedented levels of uncertainty caused by the Covid-19 pandemic. Banks, asset managers, insurers, capital markets, together with other FS organizations around the globe, all played their part in helping to ride out the storm. 

Of course, many clouds remain. FS companies are not immune to the challenges facing other sectors such as geopolitical tensions including the war in Ukraine, inflation and rising interest rates, supply chain disruptions, the prospect of regional or global recession, the heightened cyber risk landscape and increasing competition from Big Tech companies providing more financial offerings. Then March 2023 saw problems surface in the banking sector with the collapse of Silicon Valley Bank (SVB), which specialized in lending to start-ups, including fintechs, and Signature Bank, sparking investor fears, lawsuits, falling share prices and US government intervention. Meanwhile, in Europe, the Swiss government enabled a takeover of Credit Suisse by UBS amid fears that a failure to protect depositors would trigger a new global banking crisis. 

Many analysts consider systemic risk to the sector to be low as large lenders are much stronger financially than they were before the financial crisis in 2008. [1] 
Others have said that more shutdowns and seizures in the US are possible. [2] In the wake of SVB’s failure, banks will become even more conservative in their lending, according to Allianz Research. What is also certain is that regulators are going to be watching for signs of more instability across the sector very carefully.

Looking a little further ahead, and on a more positive note, agreements such as the United Nations’ 2030 Agenda for Sustainable Development, which has 17 Sustainable Development Goals (SDGs) [3] at its heart, and provides a shared blueprint for peace and prosperity for people and the planet, represents a huge opportunity for the FS sector as significant private investment will be required to achieve these goals. However, established principles for sustainable investment/insurance will need to be followed.