FLOODS , HURRICANES, MEGATRENDS AND BANKING SERVICES

FLOODS , HURRICANES, MEGATRENDS AND BANKING SERVICES

William Shakespeare was no mere playwright; he wrote with the vivid visions of a prophet or futurist, when he said,

“There is a tide in the affairs of men

Which, taken at the flood, leads on to fortune;

Omitted, all the voyage of their life

Is bound in shallows and in miseries.

On such a full sea are we now afloat,

And we must take the current when it serves,

Or lose our ventures.”

 (IV.ii.269–276)

He called them tides and floods; we call them megatrends : that we must take with speed and resilience, else we lose our ventures. In the global operating environment, we are having hurricane-level structural shifts that are shaping the world economy, behavior and lifestyle. Megatrends that have been emerging before the pandemic are now evolving at an accelerated pace. All sectors of the economy are being impacted , especially financial services.

These megatrends offer real insights into a future that already happened in financial services. It is cheap prophecy to say things will never be same in the financial services world. We are witnesses to a reshaping of the financial services landscape. Some of these megatrends are illustrated by Pictet Asset Management in the image below:

And the Floods Came…

So we rode. The idea is that there is no escaping these drivers of change. To use the metaphor of floods and tides, banks and financial institutions can choose a number of options

1.     Swim

2.     Rent a boat

3.     Build a ship

4.     Partner with the Navy

The swimmers

The response by this group is not going to be effective because they are overly built on old paradigms. The group is aware of the changes going on around but they are unable to change the natural wiring to handle it on their own.

The boat renters

They underestimate the floods. They have the right response but it is not driven by data. There is a mismatch between what they are trying to achieve and the resource allocation.

The ship builders

They have deep pockets and are overspending on the wrong competencies. They are a distracted from the core business and focus instead on keeping up with technologies.

The navy partners

This is the best route to taking advantage of the megatrends. They focus on partnerships and collaborations that create synergy. They are able to focus on their core competencies while leveraging the best technologies from their partners to deliver results.

Obasanjo Onireti