Clarity of purpose is the key to simplifying financial services

By Bernadette Howlett, Insurance Leader and Strategy& partner

The financial services industry must rise to the societal and generational challenge of reigniting the growth agenda in our sector and supporting growth for our nation
 

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Before I stepped on stage to open the Financial Services Council Summit this morning, I spoke with a few of the delegates. Their sentiments echoed those of many financial services leaders who I have spoken with in the past few months.

What I’m hearing is that there is a genuine commitment to prevent a repeat of past mistakes. Everyone is acknowledging that we need to rebuild organisations, rebuild morale and most importantly rebuild trust with stakeholders.

Of course, that’s easier said than done. The determination to make things better is certainly evident, but there are so many competing priorities demanding attention and investment. The only way through that is for financial services leaders to simplify their operations, services and products – and that can only be done with a deep understanding of purpose.

The trillion-dollar questions

As an industry, and within individual organisations, we need to ask some trillion-dollar questions:

  1. What are the societal and generational challenges we can help address in the years ahead?
  2. What kinds of customers will we serve (and choose not to serve)?
  3. Where is our leadership as an industry most impactful, and what role will we play?

The answers to these questions will give leaders clarity about their organisation’s purpose. And clarity of purpose is, without doubt, what everyone in the industry needs now and in the future.

Reigniting growth

Throughout the remainder of the FSC Summit, I will be revisiting these very questions. Already, I’m forming the view that our primary societal and generational challenge is to reignite the growth agenda in our sector and support growth for our nation. In particular, we need to focus on:

  • Good, diversified growth instead of relying on system growth.
  • The value we create for the economy and society at large.
  • Guiding Australian customers to greater self-determination of their financial services needs.
  • Using simplification to improve the pace and quality of decision-making, to drive better outcomes, both for our organisations and for our customers.

The last of these is absolutely critical. We need to dramatically simplify our organisations if we are to overcome the incredibly complex set of challenges we face.

Simplification requires making choices, and making choices requires giving things up and making trade-offs. We’ve seen the start of this in the radical restructuring of banks and their operating models.

The benefit of such simplification is that Australians will have a clearer view of their wealth creation and management. Thanks to investments in digitisation, automation and AI we are already seeing progress in this area.

But there is still much to do.

We must also define what talent we require and secure that talent, in a world of changing demographics, organisational needs and employee expectations. We must drive innovation, and streamline operating models while aligning business portfolios to areas of sustainable comparative advantage.

We must do that while making deliberate and intentional progress on the fundamental capabilities which will determine success in the years to come: customer intimacy, process control, efficiency, innovation, technology and, most importantly, trust.

That’s quite a to-do list for any leader to tackle, which is why a clear sense of purpose is going to be absolutely critical in the months and years ahead.
 

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Bernadette Howlett

Partner, Leader - Insurance, PwC Australia

Tel: +61 2 8266 4720

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