Financial Services Industry

The transformation of the financial services industry is top-of-mind for everyone in the field and blockchain might be the hottest topic in the rapidly changing world of Fintech. But how can this technology really help financial firms? This report from World Economic Forum takes a pragmatic approach to answering this question.

The report builds upon the findings from Deloitte/World Economic Forum report Disruptive Innovation in Financial Services and looks at the impact of implementing distributed ledger technology across nine sectors of financial services. Our findings suggest this technology has the potential to “live-up to the hype” and reshape financial services, but requires careful collaboration with other emerging technologies, regulators, incumbents and additional stakeholders to be successful.

The World Economic Forum’s digital identity report lays out, in detail, the argument for financial institutions to drive the development of digital identity solutions, discusses the landscape of identity solutions, provides recommendations on the construction of identity systems, and discusses the suite of benefits that these systems would bring to stakeholders.

The report, Disruptive innovation in financial services: A blueprint for digital identity, calls on financial institutions to lead the charge in developing robust digital identity solutions that would bring benefits to users, financial institutions, and society as a whole. Some of the critical steps outlined in the report include studying and understanding the user group, engaging with the public sector, and determining the technology backbone needed for the identity system. While not intended as a roadmap, this report will serve as a foundation for entities wishing to understand and ultimately act on the identity challenge.

The objective of this report is to highlight new alternative sources of capital and examine their potential for broader industry disruption in the future. Not all of the trends highlighted in this report will find broad adoption. But collectively, they hold lessons that could point towards the shape of the whole industry to come. To achieve this objective, this report describes the principal new capital sources that have arisen over the past decade, examines their drivers, and explains their effects and importance for society.

Financial services companies have gone through major changes over the last 10 years. Nonetheless, while the turmoil in financial services has been dramatic, other industries have been more radically transformed. For example, digital technology has destroyed established business models in music and publishing. Such a transformation may now be on the horizon for financial services. We believe financial services are becoming “modular”, with digital distribution platforms, new product providers, alternative sources of capital and a growth in outsourcing fundamentally reshaping the industry.
Established firms will need to respond to the modular industry structure. Some will try to compete with commerce and technology firms and build sophisticated customer platforms. Others will concentrate on areas of sustainable advantage, making the most of their customer data, analytics and funding models. And they will reinvent their back offices as supply chains.
Banks and insurers have adapted to new technology in the past and we think they will do so again. Nonetheless, financial services will be more modular in ten years’ time and today’s banks and insurers may look very different.
For consumers, modular financial services means more choice, transparency and seamless switching between multiple providers.

Rapidly advancing technologies, evolving customer expectations and a changing regulatory landscape are opening doors to disruptive innovation in financial services. From crypto-currencies to big data to peer-to-peer lending, fintech innovations have captured the attention and imagination of customers, investors and incumbents.
However, the nature and extent of the impact that these innovations will have on the financial services industry remains unclear. This document captures the results of a series of multistakeholder dialogues that explored the potential for these innovations to transform the financial ecosystem as well as the risks and opportunities that could emerge from changes in the way financial services are structured, delivered and consumed in the future in the future.

AUGUR is a forward looking study assessing the position of Europe in the world in 2030. One of the most intractable dimensions in forward-looking studies is the world of finance, despite the fact that finance will play a decisive role in the organization of our future world. This brief precisely sketches the key lines of research that AUGUR is following in its approach to the World of Finance, 2030.