The competitors facing asset and wealth managers, banks, and insurance companies aren’t who firms thought they'd be. Emerging technology presents incredible opportunities—for someone else. And change is fast. The customers seem to be changing their minds about what they value most.
Well, nobody ever said it would be easy. For some, this is a time of great opportunity. For others, it’s the end of an era. We take a look at the top 10 issues the financial services industry is facing. Download the full report or explore specific issues below.
This report, our inaugural look at the 10 most important issues facing financial institutions, is a chance to put it all in perspective. For each topic, we look at the current landscape, share our view on what will likely come next, and offer our thoughts on how you can turn the situation to your advantage.
PwC's top 10 FS issues: An introduction
PwC's Marie Carr introduces our top issues for financial services.
It’s no secret that financial services has become a digital business. But the speed and extent of the transition is downright jarring. Artificial intelligence now drives the way leading firms provide everything from customer service to investment advice. Blockchain, with its ability to store information on distributed ledgers without a central clearinghouse, could upend a variety of businesses. Digital labor, or robotic process automation, is helping firms automate things they couldn’t do before, without having to hire an army of developers. And all of this depends on robust cybersecurity, to hold off threats that are coming from multiple directions.
How business is conducted is shifting too. For decades, American firms looked to the United Kingdom as the gateway to Europe, but Brexit could change this. The financial system is still digesting changes put in place after the economic downturn. The regulatory environment next year will likely be impacted from new appointments to the federal agencies and some targeted Dodd-Frank rollback by Congress. And as the industry grapples with risk management culture, ethics, and trust, it often finds itself playing defense.
The economic backdrop for these forces also keeps changing. Asset and wealth managers, banks, and insurance companies once primarily competed against their own kind. They still do—but now, they also face competition from nontraditional market players with skills, funding, and attitude. And in a prolonged low interest rate environment, many now look at cost containment as one of the keys to survival. Finally, we see firms in a scramble for top line growth, organically and through acquisition, in a search for new revenue opportunities. Staying the same means falling behind.
Our teams in asset and wealth management, banking and capital markets, and insurance are helping our clients tackle the biggest issues facing the financial services industry. With professionals across tax, assurance, and advisory practices, we can help you find ways to thrive even in a period of uncertainty. Whether you're preparing for regulatory changes, putting FinTech/InsurTech to work, or rethinking your human capital strategy, we work together with you to resolve complex issues, identify opportunities, and deliver value to your business.
“As financial institutions look to what's coming next, we recommend that they start with a longer view. In a decade, market leaders will still be helping to finance infrastructure, enable commerce, preserve and expand wealth, and help consumers live better lives. The needs won’t go away, even if the way we fulfill them changes.”
PwC's Catherine Zhou discusses historic return on equity (ROE) and what will likely change in 2017. Conversations about disruption, finding new revenue, and cost reduction are growing, and financial institutions should focus on changes that can be made to tackle these opportunites and threats.
PwC's Andrew Nevin discusses the effect of the global macroeconomic environment on the financial services sector. Brexit, the US election, and other global events have generated a volatile state for the industry.