We’ve already seen some of how COVID-19 has changed our thoughts on the financial industry and how we engage with it. But it’s also important to look toward the future and try to understand what is driving the future of the industry once we move past COVID-19.
- Economics – low interest rates, reduced business activity and an increase in bad debts will drive the industry for some time. This could serve to lay the foundations for more collaborations and business combinations.
- Consumers – with individuals and businesses under increased financial pressure, consumer preferences for unanticipated areas may accelerate. This, in turn, could add to the challenge of managing business operations and/or give an impetus to regulators for more regulations.
- Operating models – industry-wide changes to the sector will provoke adjustments to business models, and lessons learned from the crisis will likely lead to the prioritization of “cyber”.
- Purpose – the coming decade will pose new challenges beyond digital transformation, yet surprisingly few financial institutions seem prepared for this inevitability. To succeed at increasing their resilience, financial institutions must rethink internal and external strategies, identify a valuable transformation mission for their stakeholders and build in sustainable, transparent and meaningful ways.
Regulators – a temporary relaxation of regulators’ focus on promoting competition could change the strategies of financial institutions. This may also apply outside financial services as governments actively encourage firms and industry bodies to collaborate, which would also impact how financial institutions operate.