Banking Outlook Placemat Africa content
Transforming banking for the next generation Banking is being influenced by global megatrends shaping the world. Global banking outlook 2015 African no. of cities with a population of: Global megatrends, stakeholder pressures and weakening economic growth will 2012 2012 3-5m A global marketplace $ € Where will growth come from? With whom will you compete? £ drive both evolution and revolution for banks over the next decade. 3 11 2030 5-8m 18 2030 8 As the world changes, banks are grappling with multiple stakeholder pressures. Regulators and governments Africa’s middle class is estimated to be $ 300m Where will regulation end? What will it cost? larger than India’s Demographic shifts US$90 - 100bn Who are your customers? What will they want? Changing workforce Net gain in financial and business services jobs, 2013–30 Whom to employ? Where will they work? Are higher returns gone forever? 1.5 Beijing New Delhi 1.0 million Mumbai Chongqing How to motivate staff? 1.4 million 2005–07 22% How to attract top talent? Lagos 1.6 Changing customer expectations? How to do digital better? Sources: Oxford Economics, TheCityUK, G20, Oxford Economics/Haver Analytics, "Our mobile planet," by Google, CCP Research Foundation, SNL Financial, The New York Times, EY 1.6:1 ratio of smartphone users to bank accounts in Kenya $ Post-crisis 2011–13 14% 2007 48% million Digital business $ Wharton graduates taking finance jobs million million $ Pre-crisis Will banks be safe investments? Staff 2.9 conduct costs and conductrelated provisions for 15 leading banks, 2009–13 $ Average ROE of 5 largest ASA banks Investors Africa’s infrastructure spend estimated per annum up to 2020 US$270 billion Customers How to deliver the experience consumers want? Can trust be regained? 2013 25% 73% retail customers with more than one bank 50% retail customers who have opened or closed accounts in last year Leaner but larger? Five transformation imperatives will drive new business models. 5 Collaboration Banks will have to re-determine their core businesses With customized products, customers would Pay more 14% Add products 28% Increase deposits 20% Defining a bank’s new structure Banks will have to change their operational footprint through entity rationalization, functionalization and right-shoring Se se curitie rvic s ing In a “new mediocre” era of low growth, the most successful banks will be those that master transformation. a R or g len eta orpndin C din il Co e l mmercial g lending Strategy 4 Defining a bank’s new core Equ undity a er nd wr te Sources of growth s M&A de e advisory a r c T an fin porate Corposits de IC BR Infrastructure 3 Almost every part of a bank’s business faces increased competition $€ Retail deposits Pay me nt Developed markets ail ts Rettmen s inve 17% revenue increase would enable the average global bank to deliver a 15% ROE without further cost reduction Emerging markets 2 Surviving a new era of competition bt de ng iti 1 Delivering profitable growth Focus on “core” Targeted customer segments Focused market expansion Adopting advanced technology As banks invest more, “bang for buck” and higher ROI are critical IT spend must be carefully balanced across Customer expectations Cybersecurity Distribution and sales Internal processes Product development and manufacturing Supporting infrastructure Beyond omni-channel Lower-cost, technology-enabled sales and advice Manufacturing and distribution partnerships Customer-driven products New products Functionalization Outsourcing Operating or leveraging industry utilities Right-shoring © 2015 EYGM Limited. All Rights Reserved. ED None. EYG no. EK0348
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