We continue to live in uncertain times, with ongoing challenges facing the UK and global economies.
Consumers and businesses are facing inflationary pressures, we are seeing the fallout from the rising cost of living and the industry as a whole is facing increasing regulatory changes.
There is, however, light at the end of the tunnel.
Although last year’s economic outlook was bleak, the Bank of England now predicts that interest rates will maintain a steady rhythm throughout 2023, peaking at 4.5%, before easing in 2024.
Additionally, inflation is expected to fall to between 4% and 5% by the end of 2023 and 1.5% in 2024. The UK economy is also predicted to return to its pre- pandemic size by the same time period.
Cost pressures will more than likely force families into making tough financial decisions, however our own customer data shows that, regardless of these concerns, there is still an intention among many to continue to save, invest and protect where they are able to do so.
We are confident in our ability to help our customers navigate such a complex environment, and in turn as the economy recovers, we expect both our new customer numbers and the amounts saved to grow.
As a mutual society, Scottish Friendly has a strong sense of purpose and we are dedicated to helping individuals and their families achieve financial wellbeing through friendly products and customer care.
Our purpose stems from an awareness of the struggles individuals and families face, particularly in regard to younger savers. A study by Saga found one in five parents over 50 in the UK now expect to use their savings to support their children through the cost-of-living crisis.
Scottish Friendly has made and will continue to make investment across the business to further enhance our business operations through improvements in technological and security infrastructure, together delivering cost and management efficiencies to further benefit our members.
We know that big tech firms are operating in a diverse ecosystem which includes financial services, and it is important that we not only monitor new entrants into the industry, but use this as an opportunity to grow and continue to offer the best possible customer outcomes.
We have a three-strand approach to our strategy: organic growth through our own brand product range and distribution channels, forming new partnerships and launching new products with existing partners, and acquisition and consolidation activity. We believe this continued approach works in synergy with our purpose and will allow us to meet our business objectives.
The industry is facing a fast-changing regulatory environment, aiming to enhance consumer protection. The Financial Conduct Authority's focus is on the treatment of vulnerable customers and consumer duty.
There is also an increasing demand for sustainability within consumers, regulators, and providers and 90% of S&P 500 companies now publish ESG reports.
To combat this governance, we considered the long-term future of our members and their families, investing responsibly, building strong links with the community, supporting self-resilience, and being a voice for those who are largely ignored by the rest of our industry. Our sustainability ambition sets out the steps we are taking to make a difference and live up to our purpose.
We made great progress in 2022, announcing our net zero by 2050 carbon emissions target, introducing a colleague climate action group and making a board commitment to Action for Children Partnership and Wellbeing Practitioner funding.
Some of our main goals for the future are to explore how we reduce emissions that we don’t directly control within our supply chain and establish a clearer understanding of how we can manage our wider environmental footprint and impact. For the wider regulatory environment, some of our key focus areas are consumer duty and operational resilience.
We recognise the challenges that lie ahead, and although we are faced with uncertainty, we are confident in our approach to achieve our immediate and long-term objectives with the intention of supporting our colleagues, customers and the wider community.
Stephen McGee is the chief executive of Scottish Friendly
