What might 2023 have in store? Are the good times about to roll? Cathi Harrison, MD of The Verve Group is feeling optimistic.
Approximately 3 minutes ago I wrote a few words on what I thought 2022 held for us all in financial services. About a minute and a half later, I wrote a mid-year review. And yep, it’s been mere seconds, and somehow we’re at the end of the year and I’m reflecting back.
Some of the themes I expected, and very much happened, were around ESG and Consumer Duty. They have both been extremely vocal this year. The sentiment seems to be that Consumer Duty is being very robustly embraced. And ESG will go one of two ways; there’s those who think we’ve barely scratched the surface, and those who feel it has been done to death and there’s no further to take it. We shall see where that goes.
Another theme I predicted for 2022 was around the progress of technology advancement in finance and this is where my crystal ball needs a tap or two to sharpen it up. I had seen a number of businesses – including ourselves – working on tech in late 2021 and anticipated a raft of them coming to market in 2022. I did, however, forget to factor in Hofstadter’s Law, which states that a project always takes longer than expected, even when the law is taken into account, and which appears to apply universally to tech projects.
I do think that this bodes well for an exciting, tech-enhanced 2023 (and we have our own stuff coming which we are absolutely chomping at the bit to share with financial services), good things come to those who wait…
Other themes this year have been around consolidation, which has continued to gather momentum. The free flow of cash, in all industries, has started slowing in the backdrop of the economic challenges we are all facing and this will, eventually, filter through to the acquisition space. From the conversations I’m having with the consolidator firms, however, it’s unlikely this slow-down will happen in 2023.
This year seems to have been very much about weathering the storm. It’s only with hindsight you realise how hard things have been and how much you have withstood; individually, as a company or as an industry. March 2020 and the first lockdown feels a lifetime ago; but we then hit an artificial post-Covid boom in 2021, and have spent 2022 in recovery from it. For listed companies who benefited from that boom, they have struggled with share price slumps, despite the fact their current performance, without the Covid spike, would’ve been perfectly on trajectory and a thing to celebrate. The immediate comparison to last year paints them in an unfairly negative light and 2022 seems to have been the year of things settling back down against this scenery.
At the same time, many companies I’ve spoken to (as well as here at The Verve Group) have gone through restructures, or intensive changes to their company composition. While this, along with a rough economic and industry backdrop, have meant for a very challenging year, it does mean there has been lots of hard work done on rebuilding foundations and I think (and hope and believe) that this means the potential for an outstanding 2023.
You know that ‘roaring 20’s’ economic boom we were hoping would be recreated a century later? We just may be about to see that start of it. Bottoms up!
