5 Big Ideas that will change finance in 2024, according to experts on LinkedIn

Welcome to Finance Wrap-Up UK – your fortnightly newsletter created by LinkedIn News UK finance editor Manas Pratap Singh .?

This year brought with it a rapidly changing business landscape for finance professionals and organisations.

High inflation and interest rates troubled the UK and the entire global economy. And the rapid development of technology, such as artificial intelligence, started to see greater use across various sectors, especially finance.?

As we enter the last leg of the year, eyes are on 2024 and what it brings with it. We asked our community of Top Voices and creators to share the Big Ideas they believe will define the year ahead and to help us create the UK's first-ever LinkedIn Big Ideas in Finance list.

This is by no means a complete list, and we invite you to join us! What Big Ideas do you think will emerge in 2024? Share your thoughts in the comments or publish a post, article or video on LinkedIn with #BigIdeas2024.

As inflation and interest rates reach their peak, experts suggests that policymakers may be left with no choice but to concentrate on reviving struggling parts of the economy to drive investment and spending.

"The economy won't heal itself. Policymakers have huge influence through incentives for business investment, public investment, and supporting key industries," says finance expert Louis Coke . Tax breaks, grants and targeted support will be vital with rates set to stabilise, Coke explains. However, pre-election uncertainty may delay investment next year.

While inflation is declining from pandemic-era highs, UK-specific factors could keep it above target until late 2024. And household and housing impacts from rate hikes have yet to emerge fully.

According to KPMG , UK growth is expected to slow over the remainder of this year and into 2024. Meanwhile, concerns around productivity and long-term growth are expected to linger.

The Chancellor will face demands from social programmme to climate action, even as borrowing costs rise. Resisting quick fixes in favour of long-term solutions will be challenging but critical.

"The temptation will be to plug short-term gaps. But the economy would benefit more by tackling long-term issues like productivity, climate costs and fiscal sustainability," says economist Yael Selfin .

But inflation as a risk hasn’t passed, according to the head of market analysis at RBC Brewin Dolphin Janet Mui, CFA . She says: “The labour market is actually still too tight at the moment for inflation to slow to target and stay there sustainably.”? ?

Mui forecasts that “the government has limited leeway to provide tax cuts or increase public spending even as inflation heads closer to the target”.

?? For more on economic outlooks for the year ahead, follow Janet Mui, CFA , Wei Li and Tera Allas CBE .

??Member?post spotlight: Senior investment manager Louis Coke points to policies that can help economic growth at the end of the rate hiking cycle.

As AI capabilities rapidly expand, an arms race could emerge in 2024 between banks and increasingly sophisticated scammers wielding new fraud technologies.

Experts warn that deepfakes like cloned voices and AI-enabled synthetic video could turbocharge financial crimes. Scammers are already using readily available tools to imitate voices and faces to trick victims.?

In an interview with LinkedIn News UK earlier this year, Barclays UK CEO Matt Hammerstein highlighted that the UK is "now the leading market for scams around the world". He said that it was "incredibly important" for banks to continue to invest in building up their defences to protect not just individual customers and clients but, ultimately, the economy.

In 2024, major global banks plan to invest further in advanced AI defences. Wells Fargo, for example, is training systems to spot subtle signs of deepfakes. Deutsche Bank rebuilt its monitoring tools to detect suspicious patterns automatically.?

However, tech advances also aid attackers. Cheap AI fraud software is spreading on the dark web. As criminals automate attacks, volume and customisation will increase. And shifting blame for losses, like proposals to make banks cover more scam refunds, may further enable crimes.

London-based banking and finance expert Rupak Ghose tells LinkedIn News that the industry will improve its technological defences, like better securing its data and not overrelying on a few tech vendors.

He adds the banks could use data from social media, model potential bad actors, and simulate attacks using synthetic information. This could help identify risks and vulnerabilities.

?? For more on banking and financial technology, follow Rupak Ghose , Eddie Donmez and Ignacio Ramirez Moreno, CFA .

?? Member post spotlight: Sensity AI co-founder Francesco Cavalli discusses deepfake imposter scams facing? the global banking industry.

Do you think your bank or insurer is ready to face the challenges posed by the rapid development of AI? Let us know in the comments below.?

From flooding golf courses to melting ski slopes, extreme weather is already impacting outdoor sports worldwide. As the climate crisis intensifies, experts say participation in everything from youth soccer to professional football could be disrupted.

"There are a large number of risks associated with climate impacts on sports," says Professor Mark Maslin . "This may change the value of sporting investments."

Maslin explains climate change could affect outdoor sports in several ways. Increased temperatures, humidity and shifting precipitation patterns will make playing outside dangerous at certain times and places.?

Facilities may have to alter playing surfaces. Heightened air pollution from fossil fuels and dust from aridification and wildfires will hamper training and participation. Most critically, extreme weather driven by climate change will disrupt sporting seasons and events.

According to Illai Gescheit , venture partner at 西门子能源 Ventures, this is already impacting sporting investment decisions. Investment in infrastructure will need to increase to deal with severe weather, he explains. Investments will also require climate insurance, changing risk models and increasing capital needs. He adds that investors will intensify analysis of climate scenarios when evaluating opportunities.

Investment is now also going into protecting sports, not just promoting them. From Swiss peaks to Rocky slopes, ski resorts are spending heavily to provide sufficient snow cover despite warming conditions. Some have resorted to covering glaciers with reflective blankets to reduce melting. But adaptation is costly - blanket coverage in Switzerland could cost $1.5 billion annually.

At the same time, investment is rapidly growing in esports, projected to top $1.8b (￡1.5b) globally by 2025. Given participation in tournaments and virtual leagues is impervious to climate, esports offers an alternative draw for sponsors and broadcast rights.

?? For more on sustainable finance, follow Tara Shirvani, PhD , Illai Gescheit , Cristina Cruz and Mark Maslin .

?? Member post spotlight:?Climate action planning expert Dr. Jacqui Taylor asks if F1 could end up creating an esport offer which is scrambled live when a climate shock stops an F1 Race being run.?

How else might climate change reshape sports investment? Share your thoughts below.

As multiple headwinds emerge, the pandemic-era boom for UK holiday home rentals could cool further in 2024. According to data from Hamptons estate agents, the number of holiday-let limited companies set to be struck off from company registry has already risen from just over 300 in July 2021 to more than 550 this year.

As Brits opt for foreign getaways over domestic seaside stays, demand is dropping for holiday house rentals after middle-class buyers snapped up cottages during lockdowns. "There was a mad rush to short-term lettings in 2021," said industry chair Alistair Handyside MBE .

But over the last year, rising interest rates, high inflation and increased regulation of short-term lets have taken a toll on many recent holiday rental landlords. Industry experts say the market has also saturated, with owners converting to long-term residential lets.

Dr Will Ponsonby , who owns a holiday cottage in the Lake District, has observed firsthand the changes in the holiday rental market. "There was a huge boom in people buying houses for holiday [during the pandemic] … it is much quieter now, bookings are lower and many more are booking last minute," he writes on LinkedIn.

Some locals are expecting that lower demand for holiday rentals could mean more housing stock for them. This is especially welcome news for many following the housing shortages caused by the tourism rental surge in hotspots like Cornwall.

But it may be premature to write off the British seaside, according to some, which may become a tourist hotspot yet again in the coming years amid blistering Mediterranean summers predicted due to climate change.?

?? For more on the UK real estate market, follow Richard Donnell , Patrick Edwards and Daniel Morgan .

Will they, won't they (come back to the office)? This is a question many finance employers seem to be asking themselves as they start calling back workers to the office.

Over the last few months, several major UK banks and insurers have mandated employees work from the office a few times a week. However, convincing employees to return to the office requires more than just notices. This is especially challenging for many large employers who are hoping to retain staff in a tight labour market.

Some financial institutions have already started using creative ways like offering free food and parking. Finance industry insiders say this trend looks like it will continue and grow in 2024 as more firms draw curtains on working from home.?

So, what else could we see employers offering to incentivise more days in the office?

Scott Robinson , the head of regulatory policy (UK) at 德意志银行 , believes that focusing on workplace wellbeing will be crucial for employers. By providing their employees with a "safe space" that caters to their needs, such as offering yoga classes or a sleep pod, finance employers can not only ensure that their employees enjoy coming to work but also promote their wellbeing, which, in turn, can lead to increased productivity.

Commuting is a major obstacle to productivity and daily expenses for those who prefer to work from home. According to a study by tech firm SpareMyTime , commuting costs are increasing by 12%, which is considerably higher than the inflation rate. The rise is attributed to various factors, including a 32% increase in fuel prices and a 6% increase in train ticket prices compared to last year. According to their study, London has the highest commuting costs, with an average cost of ￡6,278 – twice the national average.

"Commuting expenditures have long been a point of contention, and absorbing these costs may provide the impetus employees require," writes senior investments advisor Rana Maristani .?

But not everyone is convinced. According to future of work researcher Dr. Mansoor Soomro , offering free meals and other perks alone will not help in bringing people to the office. Employers will have to grant a certain level of autonomy and flexibility to ensure people are engaged and trust them.?

?? For more on the future of work, follow Dr. Mansoor Soomro , Rana Maristani and Scott Robinson .

Can in-office perks ever be a match to the freedom of working remotely? If yes, is there any perk that would make you more inclined to come into the office? Let us know in the comments below.??

Reported and proofread by: Manas Pratap Singh

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