The Future of Global Financial Services - Vision 2020 Mumbai September 2008

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Presentation by Ross Dawson at the Vision 2020 - Financial Services Sector conference, run by NDTV Convergence and Wipro, held in Mumbai on 12 September 2020

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The Future of Global Financial Services - Vision 2020 Mumbai September 2008

  1. 1. Creating the Future of Global Financial Services Ross Dawson Chairman, Future Exploration Network Author, Living Networks and Developing Knowledge-Based Client Relationships
  2. 3. Risk Relationships
  3. 4. <ul><li>Finite players play within boundaries </li></ul>Infinite players play with boundaries - James Carse
  4. 5. Critical uncertainties Driving forces Implications Scenarios for financial services Opportunities Scenario thinking
  5. 6. Critical uncertainties Driving forces Implications Scenarios for financial services Opportunities Scenario thinking
  6. 7. Scenario thinking Source: Shell Global Scenarios to 2025
  7. 8. Forecasting and scenarios
  8. 9. Thinking about the future of drilling Source: Global Business Network & Peter Schwartz
  9. 10. Life is full of surprises Source: Global Business Network & Peter Schwartz
  10. 11. Networks are based on standards Senior executive interviews Financial services Disruptions-trends -uncertainties Develop preliminary strategic frameworks Explore past, present and future Workshop preparation Scenario Project - Process Map Catalysts for strategic conversation Develop scenario agenda Drivers of alternative futures Preliminary scenario frameworks Scenario team develops scenarios Application in divisional strategy process Group strategy implications Scenario Book Future Vision Workshop Ongoing annual group and divisional scenario-based strategy process Growth and success Scenario thinking Strategic capabilities Responsiveness
  11. 12. Critical uncertainties Driving forces Implications Scenarios for financial services Opportunities Scenario thinking
  12. 13. Driving forces <ul><li>Economic shift </li></ul><ul><li>Demographic shift </li></ul><ul><li>Greater expectations </li></ul><ul><li>Commoditization </li></ul><ul><li>Connectivity </li></ul><ul><li>Integration </li></ul><ul><li>Modularization </li></ul><ul><li>New payment mechanisms </li></ul><ul><li>New capital markets </li></ul><ul><li>Value of relationships </li></ul>
  13. 14. BRICs are overtaking Source: Goldman Sachs
  14. 15. Demographics is destiny
  15. 16. We expect more
  16. 17. Prices are being driven down Source: UK Office of National Statistics
  17. 18. Connected to financial advice
  18. 19. Integrated information flows
  19. 20. The modular economy
  20. 21. New payment mechanisms
  21. 22. New layers for capital markets
  22. 23. Relationships matter
  23. 24. Driving forces <ul><li>Economic shift </li></ul><ul><li>Demographic shift </li></ul><ul><li>Greater expectations </li></ul><ul><li>Commoditization </li></ul><ul><li>Connectivity </li></ul><ul><li>Integration </li></ul><ul><li>Modularization </li></ul><ul><li>New payment mechanisms </li></ul><ul><li>New capital markets </li></ul><ul><li>Value of relationships </li></ul>
  24. 25. Critical uncertainties Driving forces Implications Scenarios for financial services Opportunities Scenario thinking
  25. 26. Critical uncertainties <ul><li>Globalization </li></ul><ul><li>National stability </li></ul><ul><li>Regulation </li></ul><ul><li>Privacy </li></ul><ul><li>Volatility </li></ul><ul><li>Industry structure </li></ul><ul><li>New entrants </li></ul><ul><li>Currencies </li></ul><ul><li>IT Security </li></ul><ul><li>Climate change </li></ul>
  26. 27. Is globalization inevitable?
  27. 28. The integrity of nations
  28. 29. Regulation drives industries and economies
  29. 30. Privacy, service, and pricing
  30. 31. Will complexity drive volatility?
  31. 32. Industry consolidation
  32. 33. Banks get new competitors
  33. 34. How many currencies?
  34. 35. Will IT systems be secure?
  35. 36. The impact of climate change
  36. 37. Critical uncertainties <ul><li>Globalization </li></ul><ul><li>National stability </li></ul><ul><li>Regulation </li></ul><ul><li>Privacy </li></ul><ul><li>Volatility </li></ul><ul><li>Industry structure </li></ul><ul><li>New entrants </li></ul><ul><li>Currencies </li></ul><ul><li>IT Security </li></ul><ul><li>Climate change </li></ul>
  37. 38. Critical uncertainties Driving forces Implications Scenarios for financial services Opportunities Scenario thinking
  38. 39. Key dimensions <ul><li>Aggregation : </li></ul><ul><ul><li>Fragmentation to Consolidation </li></ul></ul><ul><li>Technology uptake : </li></ul><ul><ul><li>Traditional to Transformational </li></ul></ul>
  39. 40. Scenario Framework: Global Financial Services in 2020 Consolidation Fragmentation Transformational Traditional New frontier Mega Services Agent economy Barriers Rising AGGREGATION TECHNOLOGY UPTAKE
  40. 41. New frontier Mega Services Agent economy Barriers Rising AGGREGATION TECHNOLOGY UPTAKE
  41. 42. New Frontier <ul><li>Strong global growth and availability of capital </li></ul><ul><li>Deregulation and international cooperation </li></ul><ul><li>India flourishes </li></ul><ul><li>Google, eBay, and telecoms firms become major financial players </li></ul><ul><li>Margin pressure across industry </li></ul><ul><li>Rise of mobile payments and e-cash </li></ul><ul><li>Shift away from branches </li></ul><ul><li>Intensely customized service to all tiers of clients </li></ul>
  42. 43. New frontier Mega Services Agent economy Barriers Rising AGGREGATION TECHNOLOGY UPTAKE
  43. 44. Barriers Rising <ul><li>Rise of protectionism </li></ul><ul><li>China splinters </li></ul><ul><li>Euro breaks up </li></ul><ul><li>Wealth disparities rise </li></ul><ul><li>Investors demand focus </li></ul><ul><li>Banks specialize/ global monolines </li></ul><ul><li>Proliferation of intermediaries </li></ul><ul><li>High margins for successful players </li></ul><ul><li>Terrorism impacts financial markets and insurance </li></ul>
  44. 45. New frontier Mega Services Agent economy Barriers Rising AGGREGATION TECHNOLOGY UPTAKE
  45. 46. Agent Economy <ul><li>Fluid global economy </li></ul><ul><li>Highly modular outsourcing across borders </li></ul><ul><li>Governments lose control/ consumers gain control </li></ul><ul><li>Consumers and business shift wholesale to online </li></ul><ul><li>Agents seek best price for everything/ customer loyalty nil </li></ul><ul><li>Constant product innovation </li></ul><ul><li>Markets are volatile </li></ul><ul><li>Customer service and call centers are automated </li></ul>
  46. 47. New frontier Mega Services Agent economy Barriers Rising AGGREGATION TECHNOLOGY UPTAKE
  47. 48. Mega Services <ul><li>Rise of BRIC results in multiple superpowers </li></ul><ul><li>Trade liberalization wins </li></ul><ul><li>Global financial services consolidation </li></ul><ul><li>Integration across financial services sectors </li></ul><ul><li>Profitability high but cyclical </li></ul><ul><li>High customer expectations </li></ul><ul><li>Banks diversify into other personal services, partly through alliances </li></ul><ul><li>Niche service providers emerge to support the market leaders </li></ul>
  48. 49. Scenario Framework: Global Financial Services in 2020 Consolidation Fragmentation Transformational Traditional New frontier Mega Services Agent economy Barriers Rising AGGREGATION TECHNOLOGY UPTAKE
  49. 50. Critical uncertainties Driving forces Implications Scenarios for financial services Opportunities Scenario thinking
  50. 51. Key capabilities for success in 2020 <ul><li>Specialization </li></ul><ul><li>Integration </li></ul><ul><li>Scalable relationship management </li></ul><ul><li>Cross-selling </li></ul><ul><li>Responsive strategic re-positioning </li></ul>
  51. 52. Two layers of technology in organizations Ad-hoc networks Standardized processes
  52. 53. Shifting relationship channels
  53. 54. Critical uncertainties Driving forces Implications Scenarios for financial services Opportunities Scenario thinking
  54. 55. The flow economy
  55. 56. Opportunities for Indian FS Industry <ul><li>Best-of-breed modular services </li></ul><ul><li>Adapting microfinance expertise </li></ul><ul><li>Financial Services Virtual Operator support </li></ul><ul><li>Global mobile payments </li></ul><ul><li>Branded global Joint Ventures </li></ul><ul><li>Support India’s success </li></ul>
  56. 57. Critical uncertainties Driving forces Implications Scenarios for financial services Opportunities Scenario thinking
  57. 58. We have a choice
  58. 59. Online resources “ Dawson has pulled off the nigh-impossible: improved on what was already a terrific book. Even more than before, this is essential reading for professional service firms.” - David Maister , author, Managing the Professional Service Firm www.rossdawsonblog.com Commentary, free chapters, and downloads at: “ I’m not sure that even Ross Dawson realizes how radical – and how likely – his vision of the future is.” - Seth Godin , author, Purple Cows
  59. 60. Create the future of financial services!

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