future of financial services, banks, insurance, auditors - keynote speaker

Dr Patrick Dixon Chairman Global Change Ltd

Take Hold of Your FutureBig issues for Financial Services and

for those who advise or audit them

Greatest risk is institutional blindness

only sell or do things you really believe inLife  is  Short    

Why  I  believe  in  banking  and  insurance    

‘6 words spell F U T U R E of banking’F astU rbanT ribalU niversalR adicalE thical

ALL      BIG      TRENDS      ARE      RELATED

MANY  TRENDS  CHANGE  (RELATIVELY)  SLOWLYeg  demographics,  emerging  markets,  digital  tech  

But bank strategies often overtaken by events

World can change faster than your clients can hold a board meeting

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Shocks Require Agility

EU / EuroSyria / Iran / US / Israel

China / JapanMutant virus

Libor lawsuits

(Asbestos: 730,000 claimants - 8500 defendents - $250bn already)

Banks and Insurers need

more than one strategy

WGP  1980-­‐2013  (%,constant  prices)  

US  GDP  1980-­‐2013  (%,constant  prices)  

EU  GDP  1980-­‐2013  (%,constant  prices)  

Vietnam  GDP  1985-­‐2011  

>40% WDP by 2015

� IMF - adjusted for Purchasing Power Parity

Looks  like  more  of  the  same  ?

EU card issuance/ debt - LOW / ZERO GROWTHRegulation and competition - MARGINS CUT

BIG FINES FOR PAYMENT SYSTEMS FAILURES

Payment  Revenues  Crisis

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£ 375 bn

$2.3 trillion US + $85bn a month

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The future of banking is about

EMOTION

Passions Change

Demands for more sustainable, socially responsible and ethically managed banking, stronger

accountability and far more robust auditing

Bank Customer / Client :

Simple, elegant solutions to complex problems

Anticipate, instinct, smartThought-leadership, common

sense, reliable adviceSuperb backup in crisis

Sharp insight and total honesty

300 million move to cities in China and475 million to cities in Africa by 2025

1 billion over 60 year olds in 10 years

Europe Dying 4 couples to produce singlegreat-grand child

Stop Ageing

75%  of  all  US  and  UK  wealth  owned  by  those  over  65  -­‐  but  many  need  to  work

Immigration Remittances

Drive PaymentInnovation

CUSTOMER  CHOICE  200  million  payments  globally

>  80%  in  E  Africa  >  $170bn  in  2012>  $700bn  in  2016

• Kenya  -­‐  17m  customers• $9bn  pa  -­‐  >33%  GDP• Tanzania  9m  people• 35  na^on  links  via  HomeSend  Hub•

•$550bn in 2012 - 214m transfers•150m immigrants globally•World’s poorest 48 nations = double FDI value•33% of Liberia economy•$55bn remittances by mobile in 2016

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Global  Remi_ances

lPeople like to belonglSense of identitylCommunity lFamilylPersonal advisor

Happy to Belong

1  trillionpages  

a  month

Most  bank  and  insurance  customers  now  influenced  by  

social  media

Would recommend you to a friend ?

"Perfection!, Wonderful hotel. Good value, beautiful views.“ Madrid May 20, 2013

This was the most beautiful hotel. Clean, friendly and good value.

“Worst hotel I have ever been in. Should be closed down.“ Paris April 11, 2013

NEVER stay in this terrible place. Rats, insects, dirty. Many guests got sick.

74  million  users  a  month

• Mother changed mind re banking online / mobile - in 3 hours, leapt 30 years

• Why

Market  research  cannot  predict  future

80%  web  customers  (tribe)  lost  in  ??  seconds  

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Future of London as global banking centre

Why “old” outsourcing story in India nearly over

We are only in first hour of first day of

eCommerce

e-­‐commerce  hit  $1  trillion  in  2012  e-­‐marketer  

MobileMore than a

Channel

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1.7bn  phone  users  are  unbanked

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2m  businesses  use  SQUARE  in  US

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•In UK alone....•Transactions >£600 billion pa •Credit card debt >£60bn•Average card interest rate 16%•2% commissions worth £12bn

Payments Doorway

Retail Banks and Telcos on

Collision Course

Vodafone Mastercard Sprint

Vamoosle

Free mobile devicescalls / web / TV / games / payHigher income model

2010                                                  2013                                  2015                                                    

TelcoBanks

• Zettabyte = 1024 ExabytesExabyte = 1024 PetabytesPetabyte = 1024 TerabytesTerabytes = 1024 Gigabytes That's a data explosion of 44x in approximately 10 years.

BIGData

Aramco - 30,000 computers hit - files lost

5.5 billion attacks42% increase / year

>160Gbps in denial of service1000 major attacks / hr in UK

Worries about US Prism / security services Huge potential impact on cloud computing

•Home•Work•Online•Offline•Sales•Entertain•Phone•Mobile•Chat•Inst Investor / UHNW / Corporate FD etc

ONECUSTOMER

Regulatory Swings

eg Capital Adequacy / ROI

Public pressure v Reality

NationalismExpect more efforts to skew financial

markets with government policy

Exchange rate warsCorporation tax spiral

Turning a blind eye

$40 Trillion Green Tech Boom driven by oil price, cost cuts, green activism

Shale gas 33% US supplies

200 years global supplyUp from 60 years in 5 years

120,000 terawatts of sunlight /day7,000 times total global power usePower Moscow from Libyan Desert

120,000 terawatts of sunlight /day7,000 times total power use

only sell what you believe inand would sell to your family and friends

.....The  only  corporate  value  worth  having.....  

Teams  in  top  half  of  Engagement

� 86%  more  likely  be.er  customer  metrics� 70%  more  likely  to  have  low  staff  turnover� 70%  more  likely  to  be  highly  produc>ve� 44%  more  likely  to  be  profitable  

� 10  million  surveyed  by  Gallup

BeyondCompliancePerfect compliance will keep bankers

out of prison but cannot protect brand, because public expectations change rapidly - with severe judgment on

those who justify past “unethical” behaviour on grounds that it was 100% compliant.

Truth about Retail Funds�Next miss-selling scandal?�65-75% of actively managed funds fail to beat trackers �Most fund managers are reluctant to invest own money in own retail funds and do not recommend to their friends

Agility means

specialist partners

Your clients can’t do it on their own

•Individuals•Families•Teams•Communi0es•Wide  World

Building  a  BeQer  World

Be_er  leadership,  customer  service,  underwri^ng,  risk  management,  cost  control,  marke^ng,  mo^va^on

Dr Patrick Dixon Chairman Global Change Ltd

Take Hold of Your FutureBig issues for Financial Services and

for those who advise or audit them