GoDubai
  
  
  
  
Citylife > Press Release
  Home Contact us Add to Favourites
Most Recent Postings
More Press Releses
Featured Sections

Event Finder
A daily roundup of exhibitions, promotions and other events in Dubai and the rest of the Emirates.
Submit an Event
Latest Dubai Press Releases >> Banking and Investments

 
  Share
Oliver Wyman SOFS 2018 Report Says Big Tech Offers Important Lessons for Financial Services Incumbents in the Race to Create New Value for Customers and Drive Growth 
 
Dubai, United Arab Emirates, January 23, 2018 :  According to global management consultancy Oliver Wyman, traditional financial services firms will need to accelerate customer value creation or risk conceding an increasing share of customer attention and wallet to other firms, primarily to ‘big tech.' Although the largest financial services firms in the world trace their histories back, on average, nearly 150 years, the largest ten consumer tech leaders have reached an average market capitalization 2.3x that of global financial leaders in just 1/5th the time.
 
The Oliver Wyman State of the Financial Services Industry 2018 report titled, The Customer Value Gap:  Re-calculating Route, finds that while financial services incumbents have largely recovered towards relative health ten years on from the financial crisis and conditions have improved significantly, there is a gnawing sense of concern regarding the prospects for future underlying industry growth.
 
The most prominent concern highlighted is that a group of highly successful big technology firms are generating new customer value at a much higher rate than financial services firms. “The lessons from big tech in the last decade are not just about gaining and growing customer mindshare; they also reveal the nature of future competition they will pose,” said Rick Chavez, report co-author and partner at Oliver Wyman.  “The basis for competition has shifted from products to active solutions, from product-selling to problem-solving for customers with systematic improvement in the overall value delivered to customers.”
 
The 21st annual Oliver Wyman report looks at the global mass market as a case study to demonstrate the customer value gap in financial services, and utilized extensive primary and secondary research, including a survey of approximately 4,000 mass and mass affluent customers across the US, the UK, France and Australia on customers' perception of value and their unmet financial needs.  
 
“Financial services firms need to quantify the other side of the customer value exchange, and assess how much value their solutions actually deliver to customers,” said Aaron Fine, Oliver Wyman partner and 
report co-author.  “These incumbents have focused on three categories of historical financial need: Borrow, Safeguard and Grow, but there are actually three others:  Earn, Spend and Transfer.  
 
Our global survey of consumers indicates that four of the top five current needs for the mass market customer relate to these three additional categories.  In the case of the US, if you could reduce the amount an average mass market customer spends by 4%, that would create $1,000 in annual value.  To have the same impact on financial life through an increase of deposit and investment yields or interest and principal paid on borrowings, you would need to increase the return by 33x or reduce the amount paid by 15%. So we see these sorts of areas as the coming battlegrounds for new value creation in Financial Services.” 
 
According to the report, it is in these additional categories that new value is being created by new companies already. For example, the report calculates that in the US since 2010, $1trillion of new value has been created in the borrow, save, secure businesses – largely by incumbent banks, asset managers and insurers. But an additional $1trillion of new value has been created in businesses focused on spend, earn, transfer and this has largely been created by new firms such as Big Tech firms.
 
In addition, six plays are outlined in the 2018 SOFS report to provide practical orientation on what financial services firms can do to move forward and combat the gnawing sense of concern originating from the erosion of structural advantages, such as risk-free returns on deposits, lagging industry growth, and the competitive forces emerging primarily from big tech.
 
Oliver Wyman's Managing Partner for Financial Services Ted Moynihan said, “Over the last 10 years, the Financial Services industry has fought its way back to relative health. But, in the meantime the techniques used to create new customer value have dramatically changed and the Big Tech industry are dominating customer mindshare and reaping the rewards. It's time for Financial Services to learn and react, or continue to watch value shift to other parts of the economy.”
 
Key exhibits from the 2018 report include:
  • Exhibit 1.1 The Gnawing Sense of Concern
  • Exhibit 2.1 Oliver Wyman Customer Value Framework and Survey Results
  • Exhibit 2.2 Relentless Focus on Customer Value and Growth – The Flywheel Effect
  • Exhibit 2.3 Bonding Comparison Across Industries
  • Exhibit 3.1 Global Real Income Growth for Median Household
  • Exhibit 3.2 Deteriorating State of US Mass Market Finances
  • Exhibit 3.3 The Customer Value Exchange
  • Exhibit 3.4 Oliver Wyman Financial Needs Hexagon
  • Exhibit 3.5 Top 5 Global Financial Needs for the Mass Market
  • Exhibit 3.6 Sensitivity of Impact Across Mass Market Financial Needs – By What % Would Each Category Need to Improve to Create $1,000 of Value
  • Exhibit 3.7 Market Growth Across Financial Needs
  • Exhibit 3.9 Bonding Gap Between Mass Market and Mass Affluent
  • Exhibit 4.2 Example Innovators Addressing Evolving Needs
  • Exhibit 5.1 Focus for Getting on the Growth Flywheel
  • Exhibit 5.2 Changing the Way You Change



Posted by : GoDubai Editorial Team
Viewed 9339 times
Posted on : Tuesday, January 23, 2018  
Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of GoDubai.com.
Previous Story : More than 6000 new companies join the Sharjah Chamber in 2017
Next Story : CBRE Group, Inc. Named a World's Most Admired Company by Fortune Magazine for Sixth Consecutive Year
Email this article Print this article

Share this article with your friends and followers
NewsVine

Comments

Back to Top  
Most Viewed Press Release posted in the last 7 days
Filorga Launches FLASH-NUDE Collection
The Rado DiaMaster Petite Seconde Automatic COSC The Rado watch at the top of th...
Maintain Healthy Skin Year Round
PopSockets launches a new collection with crystals from Swarovski, the must-have...
Free gold coins at Malabar Gold & Diamonds Festival
MIDO Baroncelli Lady Day & Night collection
24 Karat Gold Elixir by Mehrunisa Launches in the UAE Beauty Market
Interview with Asil Attar, CEO of Al Yasra Fashion
Holiday Gifting Made Easy with Wet n Wild Beauty Specials
Get Ready for Party Season with Lottie's new make-up hits
GAZOO Racing Wins Australia Rally at FIA World Rally Championship
Golden Mile Galleria's ‘A Cultural Flair' attracts hundreds of art lovers to Pal...
Festive Gift Sets from Bubble T
Tissot PR100 Lady Sport – Chic Glamourous Festive Season
Winter wool Christmas must- haves
Time For Enchanting Moments
Samsung Galaxy A9 – Designed to capture the world in its fullest
New 1948 Seamaster Watches Join the Ranks'
Michael Kors Collection Transeason 2019 Press Presentation
Chic and Stylish Wraps with a 3 in 1 effortless concept
Els Back for the 30th Omega Dubai Desert Classic Aiming for a Record Fourth Victory
9th Edition of China Homelife Exhibition to Have Over 3000 Exhibitors Across Bus...
Tissot PR100 Lady Sport – Chic Sporty yet Feminine
New Menu alert: Moombai & Co. launches exciting and delicious food items to its menu
Five-Star Euro NCAP for Jaguar's Electric I-PACE
DKNY Launches (Limited Edition) Holiday 2018 Collection
Global Knowledge Index 2018 and The Future of Knowledge: A Foresight Report shin...
France Attractiveness Scoreboard 2018 Released
Dubai Shopping Festival Wednesday Specials at The Smile Bar
Dubai's Most Magical Festive Market Opens at Dubai Festival City Mall
Ring in a dazzling festive season at Ibn Battuta Mall
Raja Al Gurg is one of Forbes Magazine's 100 most powerful women in the world
Get Party Ready with Champion Cleaners
Nine winners honored by DQG for their innovative ideas at the 10th Global Contin...
Dubai Customs wins 3 awards from Ideas UK 2018
Jury Announced for Epson's First Ever Win-A-Robot Competition in Europe, The Mid...
Spinneys Dubai 92 Cycle Challenge | Road Closure Timings
New ACH145 Mercedes-Benz Style Cabin Model Highlights First Presence at MEBAA fo...
Al Hosn Now Open to the Public
No P-ain, No G-ain! Mega Musclemen Return to Dubai
ICAEW recognises Middle East's best finance professionals
Voting on UAE Superbrands 2019 Begins
It's a Wrap! The Second JLT Restaurant Awards Conclude with a Glitzy Ceremony At...
His Highness Sheikh Saud discusses collaboration with British Consul-General And...
CBUAE and Central Bank of China meet to Enhance Renminbi Clearing in the UAE
Young Emirati Champion Rashid Al Dhaheri Powers Ahead to Stunning Victory at the...
Arla Foods launches initiative with UAE Ministry of Education to promote healthi...
Abu Dhabi International Airport Becomes First Transport Hub to Harvest Energy an...
Zayed Book Award Longlist Announced for ‘Young Author' Category (2018 - 2019)
Ford's Desert Driving Tips, Episode 4: Driving Safely in the Desert