Our quarterly report on business conditions and expectations in Financial Services provides a network-enabled, 12-month outlook on key drivers of economic performance in financial services.

Most in the industry expect continued mixed trends, as modest revenue growth returns but cost pressures increase and capital expenditures decline.

Financial service (FS) executives’ sentiment: Executive sentiment regarding revenues in the coming year improved compared to last quarter, while expectations regarding cost pressures in the next 12 months remained similar. Overall executives expect relatively better operating margins in 2012.

Revenue growth and cost pressures: Sixty-three percent of executives expect their company’s revenue to increase in the next 12 months but only somewhat. Further 67% of executives expect cost pressures to increase, with nearly one-third indicating higher
or much higher cost pressures.

Growth indicators: More than one-half of the executives expect an increase in sales to both new and existing customers. Among executives, 46% expect fl at R&D investments and 40% expect higher M&A deals in the next 12 months. Further 44% of executives
expect lower discretionary IT capex. More than one-third, however, expect an increase in capex investment, and one-third expect a decline during the same period.