Emerging issues for retail financial services 21 june 2011

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The World in 2020: Emerging Issues for Retail Financial Services

21 June 2011


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


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

Context


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

Imbalanced PopulaKon Growth CertainKes


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

Key Resource Constraints CertainKes


The centre of gravity of global wealth shiUs East with decreased influence for the US and Europe

Asian Wealth ShiU CertainKes


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

Ubiquitous Data Access CertainKes


Proven systems built on mobile connecKvity and increasingly flexible means of exchange provide a

Kpping point in the shiU towards the cashless society

Mobile Money Wealth


The mobile is becoming the most important means of money exchange on a global basis for the average person

Future ImplicaKons:

•  >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

•  Storage+ authenCcaCon+ control

Signals from Today:

•  Interest payment on stored value

•  Contactless payments

Mobile Money


AlternaKve on-‐line currencies are dominant for the majority of payments and transfers and

increasingly influence the ‘real’ world

Virtual Currencies Wealth


As virtual payments dominate transacCons online, virtual currencies take a role in money transfer in the real world

Future ImplicaKons:

•  Global virtual currencies

•  Dominates the mass market

•  ShiM of transacCons to virtual

•  Virtual currency storage/lending

•  Digital-‐only specialist banks

•  Digital ‘gold’ global currency

Signals from Today:

•  Mobile airCme in Africa

•  Local currencies in UK

Virtual Currencies


Rising sustainability imperaKves and increasing cost of ownership shiU the balance from

ownership to access and we prefer to rent than buy

Lease Everything Wealth


Ownership is no longer a priority as we rent rather than buy and seek to decrease our personal debt exposure

Future ImplicaKons:

•  RenCng becomes the default

•  Saving to credit to usage shiM

•  Decrease in mortgages

•  Finance for leasing companies

•  SecuriCsaCon for end customers

•  Pivotal role of trusted services

Lease Everything

Signals from Today:

•  Electric cars and road tolls

•  Samsung leasing PCs by 2015

•  Fashion rental


A wealthier, healthier older generaKon increasingly engage in more acKve lives, having extended careers

and becoming more poliKcally involved

AcKve Elderly Happiness


With over 70% of disposable income controlled by some of the over 50s, they become the primary focus for new products

Future ImplicaKons:

•  Most people will work unCl 70

•  Steady shiM in dependency raCos

•  All need to be 2x as producCve

•  ‘Old with assets’ = source of cash

•  Support for those without assets

Signals from Today:

•  UK reCrement age shiM to 68

•  Declining EU natural populaCon

•  Pensions designed for 20 yrs max

•  More equity release products

AcKve Elderly


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

Muslim Europe Mobility


A growing and accessible UK Muslim populaCon will become the sCmulus for a range of new product and service innovaCon

Future ImplicaKons:

•  80m Muslim EU populaCon

•  20 main urban centres in EU

•  Addressable + disCncCve market

•  Large demand for Islamic finance

•  Increasing repatriaCon of cash

Signals from Today:

•  Increased influence of Turkey

•  French / German actudes

•  MigraCon from North Africa

Muslim Europe


Greater informaKon overload moves our focus from simply accessing data to include the source

of the insight to disKnguish what we trust

Credible Sources Security


The changing nature of privacy and trust balances the desire for collaboraCon with concern over data access and control

Future ImplicaKons:

•  Pervasive cheap data

•  InformaCon overload for some

•  SemanCc web technologies

•  Intelligent search ubiquitous

•  Winners make data useful

•  Trusted credible brands

Credible Sources

Signals from Today:


For more informaKon: futureagenda.org growthagenda.com

Emerging issues for retail financial services 21 june 2011

Economy & Finance

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