The next step of open innovation to create and capture value for sophisticated clients and businesses in the banking, wealth and asset management industry are cross-sector ecosystems.

Sharing information and knowledge, co-innovating with clients, communities, and competitors, and collaborating with diverse players is the new reality in the digital world. All these characteristics converge with the current disruptive trends.

Leaders must embrace latest technologies, focus on the entire client journey and at the same time cope with challenges such as emerging growth regions in Asia, demographic shifts, intergenerational wealth transfers, and comply to increasing regulations.

• New growth regions
  
• Wealth transfer
• Demographics
• New market entrants

• Sophisticated clients
• Decreasing loyalty
• Digitalisation/mobility

• Cross-border compliance
  
• Capital requirements
• Banking secrecy
• Fintech/shadow banking

• Cognitive technologies
  
• Robo-advisors
• Crowdfunding
• Blockchain

FINANCIAL SERVICES

DISRUPTIVE TRENDS

Infographic focus

Growth

Wealth

Billionaires

90%

The next step of open innovation to create and capture value for sophisticated clients and businesses in the banking, wealth and asset management industry are cross-sector ecosystems. Sharing information and knowledge, co-innovating with clients, communities, and competitors, and collaborating with diverse players is the new reality in the digital world. All these characteristics converge with the current disruptive trends like cognitive intelligence, robo advisors, crowdfunding, and blockchain. Leaders must focus on the entire client journey and at the same time cope with challenges such as the rise of emerging growth regions in Asia, demographic shifts, and wealth transfers from baby boomers to millennials and comply to increasing regulations.

1.7

• Wealth in Asia trippled over the last 10 years and is expected to double until 2030 reaching US$ 40tr.
  
  

• By 2036, the banking assets of E7 will surpase G7
  
  
• By 2050, the share of global banking assets for China will be 23% followed by the U.S. with 22%
  
  
• Emerging financial centres in Singapore, Hong Kong, Shanghai, Shenzen, Dalian

+10% yearly growth until 2025 (China only)

married

widowed

10%

2%

21%

• Wealth shift of 2,400 billionaires with about US$ 8tr as of 2018 towards women
  
  
• Women in business, inclusive entrepreneurs in emerging countries will significantly rise until 2028
  
  
• Life expectancy of women is about 7% higher than that of men, especially in top wealth spots (Japan, Singapore, Hong Kong, China, UK, US)

Inheritance, marital status, widowhood, life expectancy will
significantly impact the distribution of wealth in the future!
Women will inherit about US$ 30tr over the next 40 years!

FUTURE SHARE OF NEW WEALTH GENERATION

vs. performance of old wealth

North America

Western Europe

Asia

70%

NEW

OLD

Demographics

Millennials are more likely to bank with non-banks and fintechs

• In 2018 there are equal baby boomers and Generation Y (millennials) in the U.S.
  
  
• By 2025, millennials will comprise three-quarters
  of the global workforce

~80% of millennials may switch their advisor after the wealth transfer

Millennials prefer peer-2-peer
platforms, robo-advisors, mobile banking

Competition

• Tencent and Alibaba entered as the first the financial services with WeBank, MYbank, Alipay

• Google, Apple, Facebook, Amazon, and Microsoft provide payment services and are moving into loans and current acounts
  
  
• Independent mobile banks gain market share,
  e.g. Ally, GoBank, Moven, Monzo, Fidor, Revolut, Digibank
  
  
• Ant Financial - a player of the Alibaba cross-sector ecosystem - is offering a complete solution portfolio
  
  
• Ant Financial's Yu'e Bao money market fund left behind JPMorgan, Vanguard, Fidelity and became the biggest in five years with assets of US$ 230bn and 330m clients
  

~80% of millennials may switch their advisor after the wealth transfer

See also infographic on Disruptive Technologies

All sources noted in Fasnacht, D. (2018) Open Innovation Ecosystems: Creating New Value Constellations for the Financial Services. Springer, Berlin.