FFS - The Future of Financial Services
I recently attended an interesting breakfast hosted by A.T. Kearney which focused on the next 5-10 years within Financial Services - "The golden age of Financial Services is coming to an end”.
As we know, the landscape for Financial Services is likely to change significantly over the coming years given the Royal Commission, APRA report and the sector in general being rife with disruption.
Here’s what’s shifting in the landscape of financial services:
Changes in profit sources
Over the past 30 years, the largest chunk of the industry’s profits have come from Australia’s mortgage market, but with interest rates likely to rise and sales of properties decreasing, institutions are going to need to align remuneration with non-financial outcomes.
While the mortgage market will still be reasonably steady it’s unlikely profits for the major financial institutions will be increasing over the coming years. There will be a greater focus on governance, risk, diversification of non-core offerings and a focus on creating trust again between customer and organisation.
New competitor landscape
Big banks need to really understand who their competitors are; these days they aren’t the traditional FS businesses. Key competitors are the disruptors of the tech world, the likes of Facebook and Google, who can act as quasi-brokers considering the amount of personal data they cultivate.
What if you could change your mortgage as easy as comparing your home insurance? What if banks weren’t able to count on having a customers’ business for 2, 5, 25 years? A common theme in the market is the trend towards open banking, which could be the biggest challenge the banks face in the coming years.
The key things that banks need to consider in the short term are building trust with the community again, while the medium term will be about where (and in what) they invest, as well as protecting themselves against disruption as best they can.
Many of my clients believe the Royal Commission has created opportunity. Whether that be the opportunity to refresh corporate strategy, dispose of non-core business or focus on other developing areas such as customer experience, AI, automation and machine learning.
The future of banking
We envisage an active, disruptive, marketplace with plenty of opportunity for customers on both sides of the fence. We think candidates will hope to be part of this exciting period of change and clients will be looking for diversity of thought, skills and backgrounds to help bring everyone across the Financial Services sector along for the ride!
If you want to speak about the changes afoot within the financial services industry, as well as your role within that, please reach out to me on the below details.