The Future of Global Financial Services - Vision 2020 Mumbai September 2008

Creating the Future ofGlobal Financial Services

Ross DawsonChairman, Future Exploration NetworkAuthor, Living Networks andDeveloping Knowledge-Based Client Relationships

Risk

Relationships

Finite players play within boundariesInfinite players play with boundaries

- James Carse

Critical uncertainties

Driving forces

Implications

Scenarios for financial services

Opportunities

Scenario thinking

Scenario thinking

Source: Shell Global Scenarios to 2025

Forecasting and scenarios

Thinking about the future of drilling

Source: Global Business Network & Peter Schwartz

Life is full of surprises

Source: Global Business Network & Peter Schwartz

Networks are based on standardsSenior executive

interviews

Financial servicesDisruptions-trends

-uncertainties

Develop preliminarystrategic

frameworks

Explore past, present and future

Workshoppreparation

Scenario Project - Process Map

Catalysts for strategic

conversation

Developscenario agenda

Drivers of alternative futures

Preliminaryscenario frameworks

Scenario teamdevelops scenarios

Application indivisional strategy

process

Group strategyimplications

Scenario Book

Future VisionWorkshop

Ongoing annualgroup and divisional

scenario-basedstrategy process

Growth and success

Scenario thinking

Strategic capabilities

Responsiveness


Driving forces

Implications


Opportunities

Scenario thinking

Driving forces

1. Economic shift2. Demographic shift3. Greater expectations4. Commoditization5. Connectivity6. Integration 7. Modularization8. New payment mechanisms9. New capital markets10.Value of relationships

BRICs are overtaking

Source: Goldman Sachs

Demographics is destiny

We expect more

Prices are being driven down

Source: UK Office of National Statistics

Connected to financial advice

Integrated information flows

The modular economy

New payment mechanisms

New layers for capital markets

Relationships matter

Driving forces

1. Economic shift2. Demographic shift3. Greater expectations4. Commoditization5. Connectivity6. Integration 7. Modularization8. New payment mechanisms9. New capital markets10.Value of relationships


Driving forces

Implications


Opportunities

Scenario thinking


1. Globalization2. National stability3. Regulation4. Privacy5. Volatility 6. Industry structure7. New entrants8. Currencies9. IT Security 10.Climate change

Is globalization inevitable?

The integrity of nations

Regulation drives industries and economies

Privacy, service, and pricing

Will complexity drive volatility?

Industry consolidation

Banks get new competitors

How many currencies?

Will IT systems be secure?

The impact of climate change


1. Globalization2. National stability3. Regulation4. Privacy5. Volatility 6. Industry structure7. New entrants8. Currencies9. IT Security 10.Climate change


Driving forces

Implications


Opportunities

Scenario thinking

Key dimensions

Aggregation: Fragmentation to Consolidation

Technology uptake: Traditional to Transformational

Scenario Framework: Global Financial Services in 2020

ConsolidationFragmentation

Transformational

Traditional

New frontier

MegaServices

Agent economy

BarriersRising

AGGREGATION

TEC

HN

OLO

GY

UP

TAK

E

New frontier

MegaServices

Agent economy

BarriersRising

AGGREGATION

TEC

HN

OLO

GY

UP

TAK

E

New Frontier

Strong global growth and availability of capital Deregulation and international cooperation India flourishes Google, eBay, and telecoms firms become major

financial players Margin pressure across industry Rise of mobile payments and e-cash Shift away from branches Intensely customized service to all tiers of clients

New frontier

MegaServices

Agent economy

BarriersRising

AGGREGATION

TEC

HN

OLO

GY

UP

TAK

E

Barriers Rising

Rise of protectionism China splinters Euro breaks up Wealth disparities rise Investors demand focus Banks specialize/ global monolines Proliferation of intermediaries High margins for successful players Terrorism impacts financial markets and insurance

New frontier

MegaServices

Agent economy

BarriersRising

AGGREGATION

TEC

HN

OLO

GY

UP

TAK

E

Agent Economy

Fluid global economy Highly modular outsourcing across borders Governments lose control/ consumers gain control Consumers and business shift wholesale to online Agents seek best price for everything/ customer

loyalty nil Constant product innovation Markets are volatile Customer service and call centers are automated

New frontier

MegaServices

Agent economy

BarriersRising

AGGREGATION

TEC

HN

OLO

GY

UP

TAK

E

Mega Services

Rise of BRIC results in multiple superpowers Trade liberalization wins Global financial services consolidation Integration across financial services sectors Profitability high but cyclical High customer expectations Banks diversify into other personal services, partly

through alliances Niche service providers emerge to support the market

leaders

Scenario Framework: Global Financial Services in 2020

ConsolidationFragmentation

Transformational

Traditional

New frontier

MegaServices

Agent economy

BarriersRising

AGGREGATION

TEC

HN

OLO

GY

UP

TAK

E


Driving forces

Implications


Opportunities

Scenario thinking

Key capabilities for success in 2020

Specialization

Integration

Scalable relationship management

Cross-selling

Responsive strategic re-positioning

Two layers of technology in organizations

Ad-hoc networks

Standardized processes

Shifting relationship channels


Driving forces

Implications


Opportunities

Scenario thinking

The flow economy

Opportunities for Indian FS Industry

1. Best-of-breed modular services

2. Adapting microfinance expertise

3. Financial Services Virtual Operator support

4. Global mobile payments

5. Branded global Joint Ventures

6. Support India’s success


Driving forces

Implications


Opportunities

Scenario thinking

We have a choice

Online resources

“Dawson has pulled off the nigh-impossible: improved on what was already a terrific book. Even more than before, this is essential reading for professional service firms.” - David Maister, author, Managing the Professional Service Firm

www.rossdawsonblog.comCommentary, free chapters, and downloads at:

“I’m not sure that even Ross Dawson realizes how radical – and how likely – his vision of the future is.” - Seth Godin, author, Purple Cows

Create the future of financial services!

The Future of Global Financial Services - Vision 2020 Mumbai September 2008

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