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 6875 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
Grand Mall Opens the 52nd Outlet in Al Musallah - Sharjah
Eid- Al- Fitr Gift Guide 2018
LOOTAH Perfumes launches four new springtime fragrances for Him and Her
Leading Professional Beauty Distributor Nazih Cosmetics Celebrates the launch of...
GUESS Launches Ramadan Collection 2018
Meet the FOREO family as they share their top tips for radiant skin during the ...
Amani Glam Collection
LOOTAH Perfumes launches fragrant oud ‘Ambwood'
Experience 5 Seconds to New Skin with OXYGEN-PEEL from Filorga
Three Trends to Try with Palladio Beauty
Lip Stick to my Heart - GOSH New Collections
Swatch Introduces Its Latest Spring-summer 2018 Collection
Toyota Rush makes a new beginning in the UAE
Carrera UAE Exhibition
Lexus sweeps two podium finishes at round two of 2018 AUTOBACS SUPER GT 500 series
bebe Launches First Ever Ramadan Capsule Collection
New Master Maserati Driving Courses for 2018
Max Fashion Reveals Latest 2018 Fashion Trends at Exclusive Trunk Show
Global Light and Power Celebrates 10 Years with the Opening of their New Showroo...
Dubai's New Flagship Rolex Boutique Offers Unique Experience
Celebrate a Traditional Ramadan at the First Swissôtel in Dubai
Care for your baby's sensitive skin with Corine de Farme
Diabetes & Ramadan (DAR) Alliance and Sanofi introduce new integrated digital hu...
HydroPeptide Launches Solar Defense Products in UAE
Enhance your natural beauty while staying active with The Body Shop's Sportify M...
Hamdan Bin Mohammed Heritage Center honours winners in Fourth edition of "A...
Make Ramadan Better With the Gift of Sharing
‘Tree of Life' Continues to Change Lives at Arabian Center, This Ramadan
The Balmain de Balmain II Mini is a true win-win
Dubai Holy Quran Radio launches new special programmes for Ramadan
Spinneys Puts Local Food Heroes in the Spotlight this Ramadan
Ethereum - Second In A Series Of Exclusive Cryptocurrency Watches Launched
Beautiful Kaftans for Ramadan from GUESS
TAG Heuer Partners with Global Luxury Start-up Bootcamp in Association with Arab...
Ikea Yas Island Recognised as One of the Brand's Best Stores in the World
Ramadan-Inspired Sandro SS18 Pieces
Mads Mikkelsen Spotted on Red Carpet at Cannes Wearing Ulysse Nardin Masterpiece
Celebrate The Holy Month Of Ramadan With The Night Picnic At Tub Of Butter
Get Voluminous Eyelashes and Eyebrows with Rodial's Lash and Brow Booster Serum
LG G7 Thinq Offers Deep AI Integration for Maximum User Convenience
RAK Diabetes Center in Jumeirah offering Free Lifestyle wellness checks and Diet...
Dubai foreign trade in fragrances and beauty products worth AED 20b in 2017
Aru Impressed with Team Spirit as Italian Champion Secures Top Ten Finish
Pottery Barn Kids Launches Baby Registry Service to Welcome Newborns
Google launches new feature on Search to mark Ramadan
Dubai Customs discusses cooperation with Nedaa
Facebook Launches Youth Portal, a Central Place for Teens
OMEGA Welcomes Sailing Sensations Peter Burling and Blair Tuke as Brand Ambassadors
Charity event brings early Ramadan spirit to children of determination and their...
The Ramadan Edit 2018