UK/EU Financial Services Horizon Scanning: Outlook for 2024

We started by identifying a number of key geo-political and macro drivers we think will shape the business environment this year.

We then focused discussion on how each of these drivers led to the following trends for the year ahead and what impact they might have on financial services firms from a UK and EU perspective:

1. UK / EU divergence: UK / EU regulatory regimes will continue to move apart, primarily through the Onshoring of EU Retained Law and Edinburgh Reforms. Also focus on MiFID2 and AIFMD2 divergence and MiCA.

2. ESG: As the first phase of ESG regulation has become business as usual within the financial services sector. As EU, UK and global regulators continue to push new ESG regulations , it is important to take stock of what’s coming on the horizon including UK SDR, EU SFDR 1.5 and Corporate sustainability reporting.

3. Market reform and Resilience in firms: how regulatory change is looking boost confidence and growth and foster financial and operational resilience in firms and assist economic recovery. Focus on Basel III, CRD 6 and EU Non-Performing Loans Directive, and EU DORA.

4. Conduct & Consumer protection: Recognising the continued focus on treatment of customers under scrutiny and conduct of firms. Focus UK FCA Consumer Duty vs. EU Retail Investment Strategy, as well as Diversity & Inclusion in the financial sector.