The Deloitte 2021 Financial Services Industry Outlook highlights how the pandemic has reshaped the financial services sector, accelerating digital transformation and reshaping workforce strategies. Key trends include increased focus on digital capabilities, technology investment for resilience, and redefining talent management to support remote and hybrid work models. The report emphasizes the importance of leveraging technology and innovative leadership to enhance operations and customer engagement as firms adapt to the new economic realities.

3. Deloitte 2021 FSI Outlook
Key trends and takeaways

4. • Key messages
• The pandemic has reshaped the financial services sector in a number of areas within the past 12 months,
including:
Strengthening resilience, accelerating transformation
Deloitte Financial Services Outlook 20211
Published by the Deloitte Center for Financial Services, the annual Outlook report provides an analysis of what to
expect in banking and capital markets, and insurance sectors in 2021 – and their implications for the next decade.
Technology: Accelerated digital adoption, and in some cases, tested the
strengths of organizations’ digital infrastructures.
Talent: Conventional workforce strategies reimagined, near- and long-term.
Operations: Leveraging technology to build and strengthen long-term resilience.
Source: Deloitte 2021 Banking and Capital Markets Outlook, Deloitte 2021 Insurance Outlook Reports Copyright © 2021 Deloitte Development LLC. All rights reserved.

5. 79%
…of respondents agreed
that COVID-19 has
uncovered shortcomings in
their institutions’ digital
capabilities
95%
… of respondents indicated their
institutions are already
implementing or planning to
accelerate digital transformation of
services to maintain operational
resilience over the next 6-12
months
50%
…of respondents said their
institutions’ inclination to
outsource has somewhat or
significantly increased
during the pandemic
Banking: Key trends and takeaways in technology
DIFFERENTIATING THROUGH DIGITAL TRANSFORMATION
Banks were making rapid strides in their digital
transformation journey, but the pandemic accelerated the
pace.
To meet the demands of the new realities, projects that once
took months or years were accomplished in weeks.
However, the first half of 2020 exposed vulnerabilities in
banks’ technology arsenals.
Over the next few years, banks’ CTOs will have to manage
demanding priorities of sustaining resilience, supporting cost
transformation initiatives, and enabling institutions to forge
new pathways—all at the same time.
Source: Deloitte 2021 Banking and Capital Markets Outlook
CAPITALIZING ON THE MULTIPLICATIVE VALUE OF DIFFERENT
TECHNOLOGIES
• Bolster technology infrastructure to offset stresses in the
market today, such as conversational AI to manage capacity
constraints in workouts and loan restructuring
• Place bold bets on core systems modernization using new
approaches such as modular execution
• Expand cloud technology’s deployment to reimagine
business models, foster agility, achieve scale, drive
innovation, and transform customer experience
• Embed AI with other technologies, such as cloud, IoT, 5G,
and distributed ledger, to create multiplicative value
• Get a better handle on data quality, architecture, and
governance with new approaches, e.g., knowledge maps
• Use technologies to change cost structures and reexamine
the build-buy-outsource model for technology projects
Copyright © 2021 Deloitte Development LLC. All rights reserved.

6. 79%
…of respondents believe
the pandemic exposed
shortcomings in digital
capabilities …
95%
…are accelerating
digital transformation
to maintain resilience… 66%
…of respondents expect
to increase spending on
cybersecurity, including
one in five who anticipate
a large boost
Insurance: Key trends and takeaways in technology
TECHNOLOGY IS A KEY ENABLER TO REINVENT INSURER
BUSINESS MODELS
Technology was vital in helping insurers shift to remote work
environments and ensuring employees had the tools to
conduct business while remaining connected with
intermediaries and customers.
As insurers move past Recovery from the pandemic and into
the Thrive stage, most CIOs will be reallocating tech spending
as they reprioritize ongoing and planned projects.
Our survey found many doubling down on cybersecurity,
cloud, analytics, and privacy spending.
DIGITAL TRANSFORMATION BECOMES AN EVEN BIGGER
BUSINESS IMPERATIVE
• Translate pandemic-driven adoption of tech into a lasting
shift in how insurers operate and engage with customers.
• Emphasize alternative data and predictive analytics for
insights-driven underwriting and claims decisions.
• Engage with customers to make privacy management a
competitive differentiator.
Source: Deloitte 2021 Insurance Outlook Copyright © 2021 Deloitte Development LLC. All rights reserved.

7. BOOSTING WELL-BEING AND PRODUCTIVITY THROUGH
RESILIENT LEADERSHIP
Banking leaders faced an array of challenges on the talent
front, from shifting to a remote, distributed workforce to
finding ways to keep employees engaged and productivity
high.
But these changes will likely transform talent models in the
banking industry.
Looking ahead, as banks adapt to the economic realities in
2021, bank leaders will need to make some hard decisions on
optimal talent models.
They must also move beyond current concerns about well-
being and productivity to enhance learning, teaming, and
leadership.
DEVELOPING NEW TALENT MODELS THROUGH INNOVATIVE
AND INCLUSIVE LEADERSHIP
• Future talent strategies must be agile and adaptable
• Continue to proactively recognize employee concerns and
strike the right balance between maintaining motivation and
productivity levels
• Transform talent strategies to enable employees to learn
better, faster, and more frequently with programs that focus
on “learning how to learn,” curated learning, and learning via
experiences
• Focus on ensuring that employees also feel a sense of
belonging at work
• Establish new talent models that facilitate flexible, self-
organizing teams for a common purpose. New team
structures should be tied directly to how work gets done
…of respondents said their
institutions will increase
focus on the economic
health and well-being of
individuals and communities
>80%
…of respondents indicated their
institutions have taken or are
planning to take necessary steps
such as reduced capacity, rotating
schedules, to ensure continued
health and safety of employees
Banking: Key trends and takeaways in talent
80% 9-in-10
…respondents mentioned their
institutions have enabled or
are planning to enable work
from anywhere talent plan to
maintain resilience in the next
6-12 months
Source: Deloitte 2021 Banking and Capital Markets Outlook Copyright © 2021 Deloitte Development LLC. All rights reserved.

8. CONVENTIONAL WORK STRATEGIES REIMAGINED FOR
NEAR- AND LONG-TERM
Office closures and restricted movement during the pandemic
prompted everyone that could go virtual to do so
immediately.
The sudden pivot left insurers to grapple with workplace,
workforce, and corporate culture challenges.
With periodic surges of COVID-19 infections and uncertainty
around vaccines, insurers should consider moving beyond the
traditionalist archetype (all employees eventually returning to
the office) and build a roadmap to Thrive as either
Progressives (a hybrid on-premise/virtual model) or
Visionaries (most working virtually).
ENABLING A HYBRID MODEL IS NOW MORE IMPORTANT
THAN EVER FOR AN ORGANIZATION’S SUCCESS
• Adapt talent management processes/policies to enable a
hybrid model and prepare for safe return of employees.
• Have team managers serve as micro-leaders to foster
collaboration, maintain productivity, and perpetuate
corporate culture.
• Ramp up diversity and inclusion initiatives, and target hiring
of talent with advanced data analytics and technology skills.
…of respondents have either
taken or plan to take actions
such as layoffs or
compensation reduction to
contain costs
78%
…have taken or plan to take safety
measures for employees such as
distribution of PPE, workplace
reconfiguration, enhancement of
cleaning procedures, and capacity
reduction
Insurance: Key trends and takeaways in talent
85% 67%
…agreed that their organization
remains focused on increasing
the level of diversity in hiring,
development, and leadership
Source: Deloitte 2021 Insurance Outlook Copyright © 2021 Deloitte Development LLC. All rights reserved.

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Copyright © 2021 Deloitte Development LLC. All rights reserved.