Key Challenges Facing The Global Financial Services Industry by Kimble Lewis & Company
Let us jump right into this. I recently was asked what were some key challenges facing the global financial services industry for 2014 and moving forward. I wanted to share with you Kimble Lewis & Company’s insights on this important issue.
#1. Increased costs in being agile and resilient, achieving compliance with a dynamic regulatory environment:
- Asset Management Reforms such as the Alternative Investment Fund Directive, which require managers to obtain authorization, meet on-going operating conditions and comply with transparency and reporting requirements.
- Banking and Capital Markets Reforms such as Dodd Frank Basel III Bank Regulation Federal Reserve, the most significant revisions to regulatory capital for banking organizations in years.
- Here is a clear one pager on the US Regulatory Agenda.
# 2. In this low-interest rate environment, increased regulation climate, and ferocious global marketplace, there is a need to find new profitable ways to delight consumers, increase revenues, and build enterprise efficiencies.
#3. With M&A, key challenges here are:
- Leveraging R&D and IT investments to increase customer loyalty, if completing a merger, divesture, strategic alliance, or acquisition.
- Taking care to ensure business unit strategy is married to M&A objectives.
- Having foresight to know achieving cultural integration is equally important, if not more important, than winning cost, operational, and revenue synergies. In this high-speed M&A climate, as part of the strategy, firms that focus on building, defining, and adopting high-impact behaviors across the newly combined enterprise improve their chances of having success.
#4. Defining and achieving key performance indicators (KPIs) that are relevant to the firm realizing profitable growth in the short-term, while establishing structure to achieve long-term and consistent growth, profitability, employee engagement, and consumer promoters (versus passives and detractors as the Net Promoter System identifies).
#5. Creating a dynamic marketing and branding structure that makes omni-channel interactions with consumers profitable now and in the future, meeting globalization and technological demands to the business, and meeting the subsequent evolving consumer expectations.
#6. Deciding to lead, or to follow in corporate and product innovations. We all talk about failure is good, and to fail often and early as possible. However, financial services do have brands that have expected values that can be tarnished greatly if, for example, a major financial services firm was to buck the trend, do something different and fail miserably. It may be easier for smaller firms to be more creative and to fail, but large-size financial services firms are faced with deciding how risky, how creative, and how pioneering should they be, given the risk-return tradeoffs in brand leadership, stock valuation, consumer loyalty, and market growth.
#7. Talent: Growing talent, keeping talent, and acquiring talent. Executive recruiters argue there is a war on talent. My view is the battle should be building, keeping, and expanding employee engagement for the entire workforce. With talent, there is no silver bullet. No one person can be superman or superwoman, and achieve enterprise competitive differentiation all by him or herself. Employees need to be “All In,” with an insatiable focus on delivering world-class buying experiences to consumers, suppliers, distributors, partners, investors, and shareholders.
Learn about key challenges facing the financial services industry and other topics on Kimble Lewis & Company site. Keep up with my latest ideas, suggestions, and alternatives by following my online publication, following me on Twitter @KimbleLewis, and following me on Linkedin.
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