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Challenges
The challenges facing the Australian FSI sector are many despite the economy having experienced the most prolonged economic boom for a generation.
Banking
The funding crisis emanating from the US mortgage industry has turned some organisations focus from market development and growth to cost control, and managing the impact of passing some of the cost control burden onto their customer base. Whilst top-line revenue has grown during the boom - market share for the big four banks in the core product classes has fluctuated as international and regional banking groups have developed simple and cost-effective online or branch based offers.
Many banks are moving to reengineer their internet facing sales and service processes to satisfy the demands of a new generation of tech-savvy customers who will not do business using more time consuming methods.
All of the big four banks are facing the need to replace core banking technology platforms at huge cost to provide a base for future growth plans and increased regulation in the form of Basel II. Anti-Money Laundering has had significant impact on the banks investment plans over the last few years and will remain an essential but unwelcome feature of yearly spending plans.
The success experienced by the key regional banks has also resulted in the need to invest heavily in new technology as the expectations and range of their customer base increase and they come under increasing regulatory pressure.
Insurance
Our major Australian and international insurers are also facing cost control challenges. The last ten years has seen great growth in the range of products offered by the major groups which has added to already existing issues around managing legacy product platforms and manually intense sales and fulfilment processes. Combined with the complexities generated by the merger and acquisition activity in the period and the uncertainty around risk in the light of climate change there are a full set of challenges to answer.
Wealth Management
Wealth Management has also seen a huge boom over the last ten years, partly from benevolent Australian share market conditions and the huge increase in lending to invest, but also from the compulsory savings generated through the superannuation system. Whilst the superannuation funds boom will not go away, competition for managing funds has increased as more customers have decided to actively place their funds. Volatility in the share market and the demise of some more exotic funding approaches to investment in the face of regulatory action has reduced confidence in direct investing creating a shift for some wealth managers from pure growth mode to cost control.
Summary
Understanding these challenges from both a national and international perspective allows our team to provide expert advice across a range of FSI consulting activities and to back that advice up with a proven ability to deliver complex programs of process or technology change.
Learn more about how we have delivered value to Australia’s leading organisations.
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