Future of Banking - bank trends, conference keynote speaker

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Future of banks, banking and financial services - for RBS - by conference keynote speaker, Patrick Dixon. Future of banking following the credit crunch, sub-prime crisis,and chaos in global markets. Some say banking will never be the same. What will be real impact on banking profits from global economic chaos, recession and following collapse in bank share prices. Future trends in retail banking, corporate banking, wholesale banking and investment banking. Why banking will become profitable and a good investment again. Expect further rapid consolidation in banking, with radical cuts in retail outlets and staff redundancies. This will reduce competitive pricing pressures from the market. It will also allow greater profit margins for products like commercial loans and mortgages or current accounts. Less pressures on pricing, plus reduced costs will combine to increase profitability in the longer term. Banking share prices are in turn likely to show recovery. The final cost of government rescue packages may be less than feared, if they involved providing banks with equity in return for shares. Taxpayers may actually make a gain from their public ownwership of a proportion of major banks. Remuneration for CEOs and Chairman of banks will come under scrutiny, and regulation will be stricter. However, we can expect rewards for the most skilled bankers to once again be very generous. Interest rate cuts will also by stimulate the businesses that banks lend to, and help take the edge off a long recession.

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Future of Banking - bank trends, conference keynote speaker

  1. 1. Take Hold of Your Future Big issues for Banks Dr Patrick Dixon Chairman Global Change Ltd
  2. 2. Patrick Dixon is Chairman of Global Change Ltd, author of15 books and has been ranked one of the 20 most influential business thinkers alive today (Thinkers 50), conference keynote speaker on global banking trends, strategy,leadership - presentation for senior leadership team of RBS. >500 videos of Keynotes http://www.youtube.com/pjvdixon Over 4 million views Dixon’s Futurist Website:http://www.globalchange.com 14 million unique visitors
  3. 3. Commonfeatures of all realistic scenarios
  4. 4. ALL      BIG      TRENDS      ARE      RELATED MANY  TRENDS  CHANGE  (RELATIVELY)  SLOWLY eg  demographics,  emerging  markets,  digital  tech  
  5. 5. But strategies oftenovertaken by eventsWorld can change faster thanyou can hold a board meeting
  6. 6. 10
  7. 7. • Click  to  edit  Master  text  styles 13
  8. 8. Further Shocks? EU / Euro Iran / US / Israel China / Japan Mutant virus Libor lawsuits(Asbestos: 730,000 claimants - 8500 defendents - $250bn already)
  9. 9. You need more thanone banking strategy
  10. 10. WGP  1980-­‐2013  (%,constant  prices)  
  11. 11. US  GDP  1980-­‐2013   (%,constant  prices)  
  12. 12. EU  GDP  1980-­‐2013   (%,constant  prices)  
  13. 13. Vietnam  GDP  1985-­‐2011  
  14. 14. Growth  in  real  wages
  15. 15. Future is about...24
  16. 16. £ 375 bn •$2.3 trillion US + $40 per month
  17. 17. UK  Debt  -­‐  %  of  GDP      
  18. 18. 2% inflationtarget likely to be discarded
  19. 19. 31
  20. 20. 32
  21. 21. The future is about EMOTION
  22. 22. Bank Customer / Client : Simple, elegant solutions to complex problems Anticipate, instinct, smartThought-leadership, common sense, reliable advice Superb backup in crisis
  23. 23. 80%  web  customers  lost  in  <10  seconds  
  24. 24. !?!
  25. 25.                
  26. 26. >40% WDP by 2015 — IMF - adjusted for Purchasing Power Parity
  27. 27. 300 million cities in China by 2020 Real Estate over-supply Commodity pressures
  28. 28. 1 billion over 60 year olds in 10 years
  29. 29. Europe Dying4 couples toproduce singlegreat-grand child
  30. 30. Happy to BelonglPeople like to belonglSense of identitylCommunitylFamilylPersonal advisor
  31. 31. 1  trillionpages  a   month
  32. 32. Would recommend you to a friend ?
  33. 33. 74  million  users  a  month"Perfection!, Wonderful hotel. Good value,beautiful views.“Telford UK, May 20, 2012This was the most beautiful hotel. Clean,friendly and good value. “Worst hotel I have ever been in. Should beclosed down.“Paris April, 2012:NEVER stay in this terrible place. Rats,insects, dirty. Many guests got sick.
  34. 34. NationalismAttempts to skew markets with government policy Exchange rate wars Corporation tax spiral Turning blind eye to ....
  35. 35. Why “old” outsourcing story in India nearly over
  36. 36. — Training 25,000 IT graduates pa
  37. 37. 100  mobile  payment  pla]orms   launched  in  last  5  years  but  how   many  met  real  CUSTOMER  needs  ?Google Mobile Wallet Monetise (mobile payments for banks) Square startup $3bn valuation
  38. 38. CUSTOMER  CHOICE  200  million  payments  globally>  80%  in  E  Africa  >  $170bn  in  2012>  $700bn  in  2016
  39. 39. Kenya  -­‐  17m  customers $9bn  pa  -­‐  >33%  GDP Tanzania  9m  people35  nabon  links  via  HomeSend  Hub
  40. 40. 1.7bn  phone   users  are   unbanked 62
  41. 41. 2m  businesses  use  SQUARE  in  US 63
  42. 42. Payments Doorway• In UK alone....• Transactions >£600 billion pa• Credit card debt >£60bn• Average card interest rate 16%• 2% commissions worth £12bn 64
  43. 43. VamoosleVodafone Mastercard Sprint
  44. 44. TelcoBanksFree mobile devicescalls / web / TV / games / payHigher income model 2010                                                  2013                                  2015                          
  45. 45. • Zettabyte Exabyte = 1024 Exabytes = 1024 Petabytes BIG Data Petabyte = 1024 Terabytes Terabytes = 1024 Gigabytes
  46. 46. • Home• Work• Online• Offline• Sales ONE• Entertain CUSTOMER• Phone• Mobile• Chat• Inst Investor / UHNW / Corporate FD etc
  47. 47. Regulatory Swingseg Capital Adequacy / ROIPublic pressure v Reality
  48. 48. $40 Trillion Green Tech Boomdriven by oil price, cost cuts, green activism
  49. 49. Shale gas 33% US supplies200 years global supply Up from 60 years in 5 years
  50. 50. “33-49% EU power of wind by 2050” 120,000 terawatts = sunlight /day 7,000 timeswind to methane ?use Surplus total global power Power Moscow -from Libyan Desert Gas power load balancing
  51. 51. 120,000 terawatts of ARIZONAQUEBEC from sunlight /day 7,000 times total power use
  52. 52. Falling  solar  cell  prices  
  53. 53. Solar cell generation parity
  54. 54. Only 5% crosses EU borders
  55. 55. Enough salt caverns to power Germany for a week79
  56. 56. 30% US grain burnt in cars25% of 2010 US grain à fuel—30 million acres lost—EU 5% gasoline and diesel from food
  57. 57. Life  is  Short    do things you believe in
  58. 58. Beyond Compliance Perfect compliance will keep bankersout of prison but cannot protect brand, because public expectations changerapidly - with severe judgment on those who justify past “unethical” behaviouron grounds that it was 100% compliant.
  59. 59. 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)
  60. 60. Purpose of Business All sales based on a promisePurpose of business is to deliver on the promiseProfit is your reward for doing so
  61. 61. Build a Better World individual family community world
  62. 62. Patrick Dixon is Chairman of Global Change Ltd, author of15 books and has been ranked one of the 20 most influential business thinkers alive today (Thinkers 50), conference keynote speaker on global trends, strategy, leadership. >500 videos of Keynotes http://www.youtube.com/pjvdixon Over 4 million views Dixon’s Futurist Website:http://www.globalchange.com 14 million unique visitors

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