Global Trends and their Impact on

Future of Banking

Dr Patrick Dixon Chairman Global Change Ltd
www.globalchange.com - 5...
ALL	
  	
  	
  BANKING	
  	
  	
  TRENDS	
  	
  	
  RELATED

What	
  will	
  your	
  Bank	
  (and	
  your	
  compe6tors)	
...
SIX	
  FACES	
  of	
  a	
  
spinning	
  CUBE
	
  spell	
  the	
  word

F	
  U	
  T	
  U	
  R	
  E
Most debates about future
banking and insurance
strategy are about timing
and focus
What if global recovery / Turkey
econo...
• Click	
  to	
  edit	
  Master	
  text	
  styles

9
Strategies often
overtaken by events
World can change faster than
you can hold a board meeting
Further Shocks?
EU / Euro
Syria / Iran / US / Israel
China / Japan
Mutant virus
Libor lawsuits
(Asbestos: 730,000 claimant...
WGP	
  1980-­‐2013	
  (%,constant	
  prices)	
  
US	
  GDP	
  1980-­‐2013	
  
(%,constant	
  prices)	
  
EU	
  GDP	
  1980-­‐2013	
  
(%,constant	
  prices)	
  
Vietnam	
  GDP	
  1985-­‐2011	
  
Bank Agility
requires
Simplicity
Future is about...

19
• Click	
  to	
  edit	
  Master	
  text	
  styles
• Click	
  to	
  edit	
  Master	
  text	
  styles
You need
more than
one banking
strategy
£	
  375bn
•

$2.3	
  trillion	
  US	
  +	
  $65bn	
  per	
  month
$3.4	
  trillion	
  
Reserves	
  
2% inflation
target likely to
be discarded
Future Banking is about

EMOTION
Yapı Kredi employees build relationships based on trust with all relevant parties utilising their
banking knowledge, skill...
“Great	
  customer	
  experiences”	
  	
  

31
80%	
  lost	
  in	
  seconds	
  
 	
  	
  	
  	
  	
  	
  	
  
Bank Customer / Client :

Simple, elegant solutions to
complex problems
Anticipate, instinct, smart
Thought-leadership, co...
>40%	
  WDP	
  by	
  2015
— IMF - adjusted for Purchasing Power Parity
300 million move to cities in China and
475 million to cities in Africa by 2030
1 billion over 60 year olds in 10 years
Europe Dying
4 couples to
produce single
great-grand child
0-14 years old EU 15% : Turkey 26%
>65 years old EU 18% : Turke...
75%	
  of	
  all	
  US	
  and	
  UK	
  wealth	
  owned	
  by	
  
those	
  over	
  65	
  -­‐	
  mostly	
  women
Can we stop ageing ?
Grow New Teeth
• Pigs	
  teeth	
  grown	
  inside	
  rats
• Mice	
  grow	
  new	
  teeth	
  from	
  nerve	
  cells	
  /	
 ...
Repair Heart / Brain
with stem cells
Monkeys on diet live longer
• After 20 years - 80% alive v 50% on normal calories
• Less cancer, diabetes, heart disease, ...
Slow	
  or	
  no	
  ageing	
  is	
  a	
  reality	
  in	
  animals
Japan	
  women	
  gain	
  15	
  minutes	
  of	
  life	
 ...
“Relationship Banking”
lPeople like to belong
lSense of identity
lCommunity
lFamily
lPersonal advisor
50
85%	
  of	
  leaders	
  of	
  largest	
  US	
  
corpora6ons	
  say	
  diversity	
  is	
  
key	
  to	
  innova6on

Forbes	
...
33%	
  in	
  UK	
  don’t	
  watch	
  live	
  TV
95%	
  EU	
  bandwidth	
  soon	
  video
1	
  trillion
pages	
  a	
  
month
Would recommend
you to a friend ?
1	
  trillion	
  pages	
  	
  	
  	
  	
  	
  	
  	
  	
  a	
  month
"Perfection!, Wonderful hotel. Good value,
beautiful views.“
Telford UK, May 20, 2012
This was the most beautiful hotel. C...
Italy:	
  58%	
  increase	
  in	
  
aggregator	
  sales	
  of	
  
insurance	
  policies	
  in	
  
first	
  6	
  months	
  o...
UK	
  Aggregators	
  Threat

56%	
  all	
  private	
  motor	
  insurance	
  sales
Growth	
  1-­‐2%	
  pa	
  -­‐	
  reachin...
Weakness of all
Aggregators
Nationalism
Attempts to skew markets
with government policy
Exchange rate wars
Corporation tax spiral
Turning blind eye to...
“Universal Banking”
Scale - Innovation Speed

Is the bank large enough for the future ?
Eat or be Eaten or more Strategic ...
Why “old” outsourcing story in India
nearly over
—

Training 25,000 IT graduates pa
Location
based
mobile
marketing
1500% growth car insurance black boxes

Telematics
Scale
e-­‐commerce	
  hits	
  
$1.5	
  trillion	
  in	
  2014
CUSTOMER	
  CHOICE	
  
200	
  million	
  payments	
  globally
Kenya	
  -­‐	
  17m	
  customers
$9bn	
  pa	
  -­‐	
  >33%	
  GDP
Tanzania	
  9m	
  people
35	
  naYon	
  links	
  via	
  ...
1.7bn	
  phone	
  
users	
  are	
  
unbanked

74
Global	
  Remibances
$550bn in 2012 - 214m transfers
150m immigrants globally
World’s poorest 48 nations = double FDI valu...
Western	
  Union

$76bn a year
20% charge in Africa
Tablets
Boom
•
Paypal	
  Mobile	
  
PayPal	
  	
  	
  $141m	
  -­‐	
  $4bn	
  	
  	
  	
  	
  	
  	
  2009-­‐11	
  
2m	
  businesses	
  use	
  
SQUARE	
  
in	
  US

79
Square	
  Daily	
  Volumes
	
  	
  soon	
  handling	
  7000	
  Starbucks	
  outlets	
  
Bitcoin	
  Bubble	
  and	
  Bust?	
  

Secret and untraceable
Mobile Banking
Payments Doorway
•
•
•
•
•

In UK alone....
Transactions >EU600 billion pa
Credit card debt >EU60bn
Average...
TelcoBanks
Free mobile devices
calls / web / TV / games / pay
Higher income model
2010	
  	
  	
  	
  	
  	
  	
  	
  	
  ...
•

Zettabyte
Exabyte
Petabyte
Terabytes

= 1024 Exabytes
= 1024 Petabytes
= 1024 Terabytes
= 1024 Gigabytes

BIG
Data
• 90%	
  Microso+	
  R&D

CLOUD
Aramco - 30,000 computers hit - files lost
5.5	
  billion	
  cybera;acks
42%	
  increase	
  /	
  year

>160Gbps	
  in	
  denial	
  of	
  service
1000	
  major	
  aba...
• Home
• Work
• Online
• Offline
• Sales
• Entertain
• Phone
• Mobile
• Chat
• Inst Investor / UHNW / Corporate FD etc

ON...
Regulatory
Swings
eg Capital Adequacy / ROI
Public pressure v Reality
$40 Trillion Green Tech Boom
driven by oil price, cost cuts, green activism
Shale gas 33%
US supplies
3.3m US jobs
$468bn pa + more oil
produced than Saudi by 2020

200 years global supply
Up from 6...
Boom

Bust
5	
  coal	
  plants	
  replace	
  with	
  gas	
  =	
  9000	
  megawaDs	
  wind	
  
Coal	
  prices	
  fall	
  =	
  more	
  ...
120,000 terawatts of ARIZONA
sunlight /day
QUEBEC	
  from	
  
7,000 times total power use

MOSCOW	
  from	
  SAHARA
Falling	
  solar	
  cell	
  prices	
  
120,000 terawatts wind by 2050”
“40% EU power = of sunlight /day
Surplus wind to total global to methane ?
7,000 times hyd...
Smart	
  Power	
  Regula6on	
  

UBlity	
  Co	
  controls	
  consumpBon	
  in	
  homes	
  /	
  factories

10%	
  Australia...
Germany	
  Power	
  Surplus

• In	
  June	
  2013
• Electricity	
  prices	
  became	
  nega6ve	
  
• -­‐	
  minus	
  EU150...
•

Rapid growth HVDC Super Grids

• 500,000 S Korea jobs - $200bn Smart Grid Project

•

China planning to power Moscow
Power	
  Storage	
  

Enough salt caverns
planned to power
Germany for a week
The	
  only	
  corporate	
  value	
  worth	
  having	
  

Only sell what you believe in
and would sell to your family
and ...
Beyond
Compliance
Perfect compliance will keep bankers
out of prison but cannot protect brand,
because public expectations...
Poor	
  insurance	
  image	
  with	
  customers	
  
—Marke&ng:	
  We	
  are	
  here	
  to	
  protect	
  you	
  and	
  

f...
Hidden penalties for loyal
customers will be seen as unethical
Truth about Retail Funds
— Next miss-selling scandal?
— Most actively managed funds fail to beat tracker funds,

when al...
Purpose of Business
All sales based on a promise
Purpose of business is to deliver
on the promise
Profit is your reward fo...
Profit	
  
-­‐	
  Purpose	
  -­‐
Passion
COST CUTTING
Can be demoralising
All	
  leadership	
  and	
  
innovaYon	
  comes	
  
from	
  vision	
  of	
  a	
  
beher	
  future
Idea	
  
-­‐	
  Genius	
  -­‐
SoluYon
Lesson	
  from	
  Non-­‐Profit	
  
FoundaYons
Connect	
  with	
  all	
  the	
  passions	
  
people	
  have	
  and	
  they	
...
EU20,000	
  Challenge
“4	
  word	
  phrase	
  is	
  basis	
  
of	
  all	
  markeYng,	
  
moYvaYon,	
  change	
  
managemen...
Build a Better World
individual family community world
RESOURCES
>500 videos of Keynotes

http://www.youtube.com/pjvdixon

Global Trends Website:
http://www.globalchange.com
Future of Banking, mobile banking, mobile payments, global corporate banking, private banking and retail banking trends - ...
Future of Banking, mobile banking, mobile payments, global corporate banking, private banking and retail banking trends - ...
Future of Banking, mobile banking, mobile payments, global corporate banking, private banking and retail banking trends - ...
Future of Banking, mobile banking, mobile payments, global corporate banking, private banking and retail banking trends - ...
Future of Banking, mobile banking, mobile payments, global corporate banking, private banking and retail banking trends - ...
Future of Banking, mobile banking, mobile payments, global corporate banking, private banking and retail banking trends - ...
Future of Banking, mobile banking, mobile payments, global corporate banking, private banking and retail banking trends - ...
Future of Banking, mobile banking, mobile payments, global corporate banking, private banking and retail banking trends - ...
Future of Banking, mobile banking, mobile payments, global corporate banking, private banking and retail banking trends - ...
Future of Banking, mobile banking, mobile payments, global corporate banking, private banking and retail banking trends - ...
Future of Banking, mobile banking, mobile payments, global corporate banking, private banking and retail banking trends - ...
Future of Banking, mobile banking, mobile payments, global corporate banking, private banking and retail banking trends - ...
Future of Banking, mobile banking, mobile payments, global corporate banking, private banking and retail banking trends - ...
Future of Banking, mobile banking, mobile payments, global corporate banking, private banking and retail banking trends - ...
Future of Banking, mobile banking, mobile payments, global corporate banking, private banking and retail banking trends - ...
Future of Banking, mobile banking, mobile payments, global corporate banking, private banking and retail banking trends - ...
Future of Banking, mobile banking, mobile payments, global corporate banking, private banking and retail banking trends - ...
Future of Banking, mobile banking, mobile payments, global corporate banking, private banking and retail banking trends - ...
Future of Banking, mobile banking, mobile payments, global corporate banking, private banking and retail banking trends - ...
Future of Banking, mobile banking, mobile payments, global corporate banking, private banking and retail banking trends - ...
Future of Banking, mobile banking, mobile payments, global corporate banking, private banking and retail banking trends - ...
Future of Banking, mobile banking, mobile payments, global corporate banking, private banking and retail banking trends - ...
Future of Banking, mobile banking, mobile payments, global corporate banking, private banking and retail banking trends - ...
Future of Banking, mobile banking, mobile payments, global corporate banking, private banking and retail banking trends - ...
Future of Banking, mobile banking, mobile payments, global corporate banking, private banking and retail banking trends - ...
Future of Banking, mobile banking, mobile payments, global corporate banking, private banking and retail banking trends - ...
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Future of Banking, mobile banking, mobile payments, global corporate banking, private banking and retail banking trends - Futurist Keynote Speaker - Lecture Slides

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Future of banking, future of retail banking, corporate banking, wholesale banking and private banking. Investment banking trends. Future of banking regulation and compliance in financial services. Future of insurance, mobile marketing and customer expectations, choices and lifestyle trends. Future of alternative payment methods including PayPal, mPesa and Bitcoin. How banking customers are changing. Future of consolidation and mergers in global banking.

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Future of Banking, mobile banking, mobile payments, global corporate banking, private banking and retail banking trends - Futurist Keynote Speaker - Lecture Slides

  1. 1. Global Trends and their Impact on Future of Banking Dr Patrick Dixon Chairman Global Change Ltd www.globalchange.com - 5 million video views
  2. 2. ALL      BANKING      TRENDS      RELATED What  will  your  Bank  (and  your  compe6tors)  look  like  in  2020  ?
  3. 3. SIX  FACES  of  a   spinning  CUBE  spell  the  word F  U  T  U  R  E
  4. 4. Most debates about future banking and insurance strategy are about timing and focus What if global recovery / Turkey economy / mobile payments / retail spending / bank regulation / inflation / demographics, the EU, Middle East and rise of Asian markets all change faster than expected?
  5. 5. • Click  to  edit  Master  text  styles 9
  6. 6. Strategies often overtaken by events World can change faster than you can hold a board meeting
  7. 7. Further Shocks? EU / Euro Syria / Iran / US / Israel China / Japan Mutant virus Libor lawsuits (Asbestos: 730,000 claimants - 8500 defendents - $250bn already)
  8. 8. WGP  1980-­‐2013  (%,constant  prices)  
  9. 9. US  GDP  1980-­‐2013   (%,constant  prices)  
  10. 10. EU  GDP  1980-­‐2013   (%,constant  prices)  
  11. 11. Vietnam  GDP  1985-­‐2011  
  12. 12. Bank Agility requires Simplicity
  13. 13. Future is about... 19
  14. 14. • Click  to  edit  Master  text  styles
  15. 15. • Click  to  edit  Master  text  styles
  16. 16. You need more than one banking strategy
  17. 17. £  375bn • $2.3  trillion  US  +  $65bn  per  month
  18. 18. $3.4  trillion   Reserves  
  19. 19. 2% inflation target likely to be discarded
  20. 20. Future Banking is about EMOTION
  21. 21. Yapı Kredi employees build relationships based on trust with all relevant parties utilising their banking knowledge, skills and commitment to corporate values; they trust those that they grant responsibility and authority. Consistent with the Bank’s corporate values, Yapı Kredi employees keep their promises in a timely and accurate manner. They take responsibility for their customers’ problems, find rapid solutions and follow up on the results.
  22. 22. “Great  customer  experiences”     31
  23. 23. 80%  lost  in  seconds  
  24. 24.                
  25. 25. Bank Customer / Client : Simple, elegant solutions to complex problems Anticipate, instinct, smart Thought-leadership, common sense, reliable advice Superb backup in crisis
  26. 26. >40%  WDP  by  2015 — IMF - adjusted for Purchasing Power Parity
  27. 27. 300 million move to cities in China and 475 million to cities in Africa by 2030
  28. 28. 1 billion over 60 year olds in 10 years
  29. 29. Europe Dying 4 couples to produce single great-grand child 0-14 years old EU 15% : Turkey 26% >65 years old EU 18% : Turkey 7%
  30. 30. 75%  of  all  US  and  UK  wealth  owned  by   those  over  65  -­‐  mostly  women
  31. 31. Can we stop ageing ?
  32. 32. Grow New Teeth • Pigs  teeth  grown  inside  rats • Mice  grow  new  teeth  from  nerve  cells  /  gum
  33. 33. Repair Heart / Brain with stem cells
  34. 34. Monkeys on diet live longer • After 20 years - 80% alive v 50% on normal calories • Less cancer, diabetes, heart disease, strokes, brain decay 46
  35. 35. Slow  or  no  ageing  is  a  reality  in  animals Japan  women  gain  15  minutes  of  life  expectancy  every  hour • Rockfish, Turtles, some Whales • No signs of getting old
  36. 36. “Relationship Banking” lPeople like to belong lSense of identity lCommunity lFamily lPersonal advisor
  37. 37. 50
  38. 38. 85%  of  leaders  of  largest  US   corpora6ons  say  diversity  is   key  to  innova6on Forbes  study
  39. 39. 33%  in  UK  don’t  watch  live  TV
  40. 40. 95%  EU  bandwidth  soon  video
  41. 41. 1  trillion pages  a   month
  42. 42. Would recommend you to a friend ?
  43. 43. 1  trillion  pages                  a  month
  44. 44. "Perfection!, Wonderful hotel. Good value, beautiful views.“ Telford UK, May 20, 2012 This was the most beautiful hotel. Clean, friendly and good value. “Worst hotel I have ever been in. Should be closed down.“  Paris April, 2012 NEVER stay in this terrible place. Rats, insects, dirty. Many guests got sick.
  45. 45. Italy:  58%  increase  in   aggregator  sales  of   insurance  policies  in   first  6  months  of  2013   v  2012
  46. 46. UK  Aggregators  Threat 56%  all  private  motor  insurance  sales Growth  1-­‐2%  pa  -­‐  reaching  saturaYon 30%  of  consumers  select  cheapest  policy   Further  58%  select  policy  in  top  five  cheapest ObjecYve  measure  of  brand  value
  47. 47. Weakness of all Aggregators
  48. 48. Nationalism Attempts to skew markets with government policy Exchange rate wars Corporation tax spiral Turning blind eye to ....
  49. 49. “Universal Banking” Scale - Innovation Speed Is the bank large enough for the future ? Eat or be Eaten or more Strategic Mergers
  50. 50. Why “old” outsourcing story in India nearly over
  51. 51. — Training 25,000 IT graduates pa
  52. 52. Location based mobile marketing
  53. 53. 1500% growth car insurance black boxes Telematics Scale
  54. 54. e-­‐commerce  hits   $1.5  trillion  in  2014
  55. 55. CUSTOMER  CHOICE   200  million  payments  globally
  56. 56. Kenya  -­‐  17m  customers $9bn  pa  -­‐  >33%  GDP Tanzania  9m  people 35  naYon  links  via  HomeSend  Hub
  57. 57. 1.7bn  phone   users  are   unbanked 74
  58. 58. Global  Remibances $550bn in 2012 - 214m transfers 150m immigrants globally World’s poorest 48 nations = double FDI value 33% of Liberia economy $55bn remittances by mobile in 2016 •
  59. 59. Western  Union $76bn a year 20% charge in Africa
  60. 60. Tablets Boom •
  61. 61. Paypal  Mobile   PayPal      $141m  -­‐  $4bn              2009-­‐11  
  62. 62. 2m  businesses  use   SQUARE   in  US 79
  63. 63. Square  Daily  Volumes    soon  handling  7000  Starbucks  outlets  
  64. 64. Bitcoin  Bubble  and  Bust?   Secret and untraceable
  65. 65. Mobile Banking Payments Doorway • • • • • In UK alone.... Transactions >EU600 billion pa Credit card debt >EU60bn Average card interest rate 16% 2% commissions worth >£EU12bn 82
  66. 66. TelcoBanks Free mobile devices calls / web / TV / games / pay Higher income model 2010                                                  2013                                  2015                          
  67. 67. • Zettabyte Exabyte Petabyte Terabytes = 1024 Exabytes = 1024 Petabytes = 1024 Terabytes = 1024 Gigabytes BIG Data
  68. 68. • 90%  Microso+  R&D CLOUD
  69. 69. Aramco - 30,000 computers hit - files lost
  70. 70. 5.5  billion  cybera;acks 42%  increase  /  year >160Gbps  in  denial  of  service 1000  major  abacks  /  hr  in  UK Worries  about  US  Prism  /  security  services  
  71. 71. • Home • Work • Online • Offline • Sales • Entertain • Phone • Mobile • Chat • Inst Investor / UHNW / Corporate FD etc ONE CUSTOMER
  72. 72. Regulatory Swings eg Capital Adequacy / ROI Public pressure v Reality
  73. 73. $40 Trillion Green Tech Boom driven by oil price, cost cuts, green activism
  74. 74. Shale gas 33% US supplies 3.3m US jobs $468bn pa + more oil produced than Saudi by 2020 200 years global supply Up from 60 years in 5 years
  75. 75. Boom Bust
  76. 76. 5  coal  plants  replace  with  gas  =  9000  megawaDs  wind   Coal  prices  fall  =  more  coal  burnt  in  Vietnam  and  China 57  coal  plants  closed  in  US  in  2012  
  77. 77. 120,000 terawatts of ARIZONA sunlight /day QUEBEC  from   7,000 times total power use MOSCOW  from  SAHARA
  78. 78. Falling  solar  cell  prices  
  79. 79. 120,000 terawatts wind by 2050” “40% EU power = of sunlight /day Surplus wind to total global to methane ? 7,000 times hydrogen - power use Power Moscow from Libyan Desert
  80. 80. Smart  Power  Regula6on   UBlity  Co  controls  consumpBon  in  homes  /  factories 10%  Australian  power  genera6on  only  used  for  72  hours  a  year Energy  prices  can  soar  from  $50/Mw  hour  to  $10,000/  Mw  hour
  81. 81. Germany  Power  Surplus • In  June  2013 • Electricity  prices  became  nega6ve   • -­‐  minus  EU150  /  MWhr  !!
  82. 82. • Rapid growth HVDC Super Grids • 500,000 S Korea jobs - $200bn Smart Grid Project • China planning to power Moscow
  83. 83. Power  Storage   Enough salt caverns planned to power Germany for a week
  84. 84. The  only  corporate  value  worth  having   Only sell what you believe in and would sell to your family and friends
  85. 85. Beyond Compliance Perfect compliance will keep bankers out of prison but cannot protect brand, because public expectations change rapidly - with severe judgment on those who justify past “unethical” behaviour on grounds that it was 100% compliant.
  86. 86. Poor  insurance  image  with  customers   —Marke&ng:  We  are  here  to  protect  you  and   family,  to  pay  out  generously  and  quickly  if   something  happens  to  you,  giving  you  peace   of  mind  at  a  fair  price.     —Investors:      We  make  shareholders  as  much   wealth  as  we  can  without  breaking  laws.  We   raise  premiums  as  o@en  as  we  can,  and  pay   out  as  liAle  as  possible  to  finance  dividends.
  87. 87. Hidden penalties for loyal customers will be seen as unethical
  88. 88. Truth about Retail Funds — Next miss-selling scandal? — Most actively managed funds fail to beat tracker funds, when all charges deducted — Most fund managers I have surveyed (total > $1 trillion under management) are reluctant to invest own money in own retail funds unless they are required to, and reluctant to recommend own funds to family / friends — “50% of us sell funds of funds but only 5% of us invest in them” — Ethical questions since whole purpose of active management is to protect wealth, not erode it (as is most likely outcome under current business models)
  89. 89. Purpose of Business All sales based on a promise Purpose of business is to deliver on the promise Profit is your reward for doing so
  90. 90. Profit   -­‐  Purpose  -­‐ Passion
  91. 91. COST CUTTING Can be demoralising
  92. 92. All  leadership  and   innovaYon  comes   from  vision  of  a   beher  future
  93. 93. Idea   -­‐  Genius  -­‐ SoluYon
  94. 94. Lesson  from  Non-­‐Profit   FoundaYons Connect  with  all  the  passions   people  have  and  they  will  follow   you  to  the  ends  of  the  earth,   promote  what  you  do  with  pride,   and  may  even  be  willing  to  work   for  you  for  next  to  nothing
  95. 95. EU20,000  Challenge “4  word  phrase  is  basis   of  all  markeYng,   moYvaYon,  change   management and  leadership”
  96. 96. Build a Better World individual family community world
  97. 97. RESOURCES >500 videos of Keynotes http://www.youtube.com/pjvdixon Global Trends Website: http://www.globalchange.com

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