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
