A wave of restructuring is expected in the financial services sector over the next five years, according to research from PricewaterhouseCoopers and the Economist Intelligence Unit.

Senior executives from 123 financial services companies took part in the online survey. Almost four out of five respondents said they expected their firms to be restructured significantly within the next five years and 92% of respondents said the restructuring would be `important, very important or integral' to helping complete their strategies.

Respondents through changes over the next five years would be set by the regulators as much as by institutions themselves, revealed the survey. Almost a third of the respondents pointed to restrictions imposed on them by regulators, such as tougher rules on compliance, capital needs and competition, as being a key external driver of restructuring.

Some 64% and 53% of respondents respectively said regulatory capital and reporting requirements respectively were the two issues most likely to have an impact on their firms' strategy for restructuring.

Asked whether the increasing compliance burden and capital requirements for financial institutions would encourage them to exit existing businesses rather than enter new ones, the respondents were divided; 51% agreed and 49% disagreed.

Respondents in Western Europe appeared to feel the weight of regulation more heavily than other regions, said PwC. 62% of them agreed they would be more likely to exit businesses than seek out new ventures as a result of compliance requirements.

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