Forecast for financial services in 2010: no room for laggards

Abstract

Purpose

The worldwide market for financial services is evolving rapidly, and is likely to look very different by the year 2010. This study identifies major market drivers and operational challenges that financial institutions will likely face over the next four years and pin‐points the strategies and practices recommended to create the “Hallmarks of Success”.

Design/methodology/approach

This report is based on industry and literature reviews and builds on research carried out by Deloitte Research on the financial services industry.

Findings

New asset classes such as private equity and hedge funds are attracting a growing number of investors. The payments business, a major source of revenue for financial institutions, is being restructured. In many countries, the impending retirement of baby boomers is changing the focus of financial services from long‐term accumulation to managed consumption. Emerging markets are becoming increasingly important sources of growth for firms in mature economies. Financial institutions around the world will need to forge the hallmarks of operational excellence in areas such as offshoring, taxation and financial reporting, service and process innovation, and in internal control to hold on to their growth and profitability.

Practical implications

The financial services industry is changing rapidly with the rules of the game being rewritten faster than ever before. Globalization, increased regulation, commoditization of products, and decreased margins are just some challenges that require an overhaul of current business thinking. Companies that aspire to reach, or hold on to, leadership positions need to understand these changes and adapt to them.

Originality/value

This report documents the real‐time changes happening in the financial services industry and draws lessons from them for the medium term. These lessons are valuable for companies looking for strategies to stay on top in the midst of the changes currently sweeping the industry.

Citation

Gentle, C. (2007), "Forecast for financial services in 2010: no room for laggards", Journal of Business Strategy, Vol. 28 No. 5, pp. 20-28. https://doi.org/10.1108/02756660710820794