A talk given to several banks on some of the possible future impacts on the retail finance sector from 6 changes on the 2020 horizon. Each insight is supported by potential implications for the sector and signals from today that support this.

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The
World
in
2020:
Emerging
Issues
for
Retail
Financial
Services
21
June
2011

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The
Future
Agenda
is
the
world’s
largest
open
foresight
programme
that
ran
throughout
2010
and
engaged
expert
input
from
over
140
countries
to
gain
a
unique
global
view

3. Context
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OrganisaKons
increasingly
seek
to
complement
their
Inside-­‐
Out
perspecKves
with
informed
Outside-­‐In
views
of
how
the
world
around
them
is
changing
and
with
what
impact

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srowth
Imbalanced
PopulaKon
Gtyles
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CertainKes
By
2020
we
will
add
another
750m
people
to
the
planet,
mostly
in
places
least
able
to
accommodate
them

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Key
Resource
Constraints
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CertainKes
We
will
see
economic,
physical
and
poliKcal
shortages
of
key
materials
that
result
in
major
changes
in
our
perspecKves

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MShiU
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Asian
Wealth
aster
CertainKes
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The
centre
of
gravity
of
global
wealth
shiUs
East
with
decreased
influence
for
the
US
and
Europe

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Ubiquitous
Data
Access
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CertainKes
We
will
be
connected
everywhere
-­‐
everything
that
can
benefit
from
a
network
connecKon
will
have
one

8. Click
to
Money
Mobile
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Wealth
Proven
systems
built
on
mobile
connecKvity
and
increasingly
flexible
means
of
exchange
provide
a
Kpping
point
in
the
shiU
towards
the
cashless
society

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Money
Mobile
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The
mobile
is
becoming
the
most
important
means
of
money
exchange
on
a
global
basis
for
the
average
person
Future
ImplicaKons:
Signals
from
Today:
• >50%
of
money
transfer
digital
• 15-­‐20%
cash
for
grey
economy
• <£1k
transacCons
widespread
• Drives
micropayment
growth
• 1bn
m-­‐payment
users
by
2015
• Decline
of
plasCc
credit
cards
• Interest
payment
on
stored
value
• Storage+
authenCcaCon+
control
• Contactless
payments

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Currencies
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Virtual
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Wealth
AlternaKve
on-­‐line
currencies
are
dominant
for
the
majority
of
payments
and
transfers
and
increasingly
influence
the
‘real’
world

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Virtual
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As
virtual
payments
dominate
transacCons
online,
virtual
currencies
take
a
role
in
money
transfer
in
the
real
world
Future
ImplicaKons:
Signals
from
Today:
• Global
virtual
currencies
• Dominates
the
mass
market
• ShiM
of
transacCons
to
virtual
• Virtual
currency
storage/lending
• Digital-­‐only
specialist
banks
• Mobile
airCme
in
Africa
• Digital
‘gold’
global
currency
• Local
currencies
in
UK

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Lease
Everything
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Wealth
Rising
sustainability
imperaKves
and
increasing
cost
of
ownership
shiU
the
balance
from
ownership
to
access
and
we
prefer
to
rent
than
buy

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Ownership
is
no
longer
a
priority
as
we
rent
rather
than
buy
and
seek
to
decrease
our
personal
debt
exposure
Future
ImplicaKons:
Signals
from
Today:
• RenCng
becomes
the
default
• Saving
to
credit
to
usage
shiM
• Decrease
in
mortgages
• Finance
for
leasing
companies
• Electric
cars
and
road
tolls
• SecuriCsaCon
for
end
customers
• Samsung
leasing
PCs
by
2015
• Pivotal
role
of
trusted
services
• Fashion
rental

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AcKve
Elderly
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Happiness
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styles
A
wealthier,
healthier
older
generaKon
increasingly
engage
in
more
acKve
lives,
having
extended
careers
and
becoming
more
poliKcally
involved

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AcKve
Elderly
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With
over
70%
of
disposable
income
controlled
by
some
of
the
over
50s,
they
become
the
primary
focus
for
new
products
Future
ImplicaKons:
Signals
from
Today:
• Most
people
will
work
unCl
70
• UK
reCrement
age
shiM
to
68
• Steady
shiM
in
dependency
raCos
• Declining
EU
natural
populaCon
• All
need
to
be
2x
as
producCve
• Pensions
designed
for
20
yrs
max
• ‘Old
with
assets’
=
source
of
cash
• More
equity
release
products
• Support
for
those
without
assets

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Muslim
Europe
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Mobility
With
increasing
economic
migraKon
the
total
Muslim
populaKon
of
Europe
is
similar
in
size
to
that
of
Germany
and
a
rising
cultural
/
poliKcal
influence

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Muslim
Europe
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A
growing
and
accessible
UK
Muslim
populaCon
will
become
the
sCmulus
for
a
range
of
new
product
and
service
innovaCon
Future
ImplicaKons:
Signals
from
Today:
• 80m
Muslim
EU
populaCon
• 20
main
urban
centres
in
EU
• Increased
influence
of
Turkey
• Addressable
+
disCncCve
market
• French
/
German
actudes
• Large
demand
for
Islamic
finance
• MigraCon
from
North
Africa
• Increasing
repatriaCon
of
cash

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Security
Greater
informaKon
overload
moves
our
focus
from
simply
accessing
data
to
include
the
source
of
the
insight
to
disKnguish
what
we
trust

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The
changing
nature
of
privacy
and
trust
balances
the
desire
for
collaboraCon
with
concern
over
data
access
and
control
Future
ImplicaKons:
Signals
from
Today:
• Pervasive
cheap
data
• InformaCon
overload
for
some
• SemanCc
web
technologies
• Intelligent
search
ubiquitous
• Winners
make
data
useful
• Trusted
credible
brands

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For
more
informaKon:
futureagenda.org
growthagenda.com