There are huge forces at work in the global economy today spurred by shifts in global economic power, economic change, urbanisation, demographic changes, technological advances, and more.
Each of these forces will shape our lives in many ways, but for the financial services industry, as the post Financial Crisis regulatory wave retreats, technology stands above the rest.
Seeing the future clearly and developing a proactive, strategic response – rather than simply reacting to events – will set apart the winners from the losers in a fast-evolving market.
In our Future of Financial Services Series, we look at these changes, and offer some suggestions on how to prepare for the opportunities and threats ahead.
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If the shake-up in other commercial sectors teaches us anything, it is that no business is immune from today’s rapid and relentless shifts in technology and customer expectations. For life insurance, this is no exception. Faced with a rapidly evolving and potentially disruptive set of market dynamics; including technological advances, foreign entrants, media scrutiny, and diminishing customer trust; the industry must now have absolute clarity around its purpose, intent, and capability. In this context, the most competitive life insurers going forward will focus on a ‘way to play’ in the market, will identify a differentiated proposition aligned to the customer, and will look to optimise their competencies – and concentrate on their core.
To help an industry doing it tough, our paper focuses on:
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The Australian banking sector is in a state of flux. Renewed debate about culture and reputation, as well as uncertainty around the pace, scale and breadth of strategic disruption to the industry, mean that the bank of the future will look very different to the bank of today. Bankers, regulators, directors and investors would do well to ask:
Six powerful forces are shaping the banking industry in Australia today: changing demographics, technology, consumer behaviour, Asia, government and a subdued global economy. These forces are driving change at precisely the time when traditional value drivers for the industry – asset growth and, to a lesser extent, leverage – are dissipating, and may even reverse. As a result, return expectations and the future outlook for the industry are being revised down with almost every earnings announcement.
To continue creating economic profit for shareholders, banks need to become simpler and smaller, but more deeply connected to customers than they have been in the past. How? We propose six fundamental priorities for banks in the years ahead:
The winners – those who can successfully navigate this landscape – will also be more valuable than they are today. They will have more diverse sources of income and more sustainable economic profit. But this will not apply to everyone, and possibly not even to the industry as a whole.
For perhaps just the third time in three decades, the industry is poised for fundamental realignment. Managing this transition, and the timing of necessary changes, will be crucial to success in the years ahead.
Financial Services Industry Leader, Sydney
Tel: +61 2 8266 2006
Financial Services Industry COO, Sydney
Tel: +61 2 8266 0172
Partner - Assurance, Sydney
Tel: +61 2 8266 1832
Partner - Consulting, Sydney
Tel: +61 2 8266 4726
Leader - Financial Services Diversity and Inclusion, Sydney
Tel: + 61 2 8266 6471
Leader - Superannuation, Sydney
Tel: +61 2 8266 7937
Partner - Tax, Sydney
Tel: +61 2 8266 8803
Leader - Insurance, Sydney
Tel: +61 2 8266 7857
Partner - Deals, Sydney
Tel: +61 2 8266 7230
Leader - Banking and Capital Markets, Melbourne
Tel: +61 3 8603 0137
Leader - Asset and Wealth Management, Sydney
Tel: +61 2 8266 1205
Tel: +61 2 8266 0198