Three trends will dominate and disrupt European financial services over the next five years, according to a new report by PwC and Luxembourg for Finance, the development agency for the country’s financial centre.
Much like Amazon today, new online platforms will become the dominant customer interface with Europe’s financial services industry. Retail and business customers will be able to search, buy and manage products that are bespoke and offer best value for their specific needs. These platforms will offer a new level of transparency, comparability and convenience, which will directly affect the four main sectors of financial services.
For Europe’s banks, they will need to quickly evolve into whole solution providers and one stop shops for their clients’ specific financial needs, aggregating their own products alongside innovation only available through third parties.
In asset management, pressure will intensify from a fundamental shift in client preference, underpinned by millennials inheriting billions from the baby boomers. This generation of investors will favour managers with compelling and transparent ESG propositions, coupled with technology that is personalised and easy to use. The pressure they apply, alongside closer regulatory scrutiny, will separate the wheat from the chaff and lead a movement towards being best-in-class.
Fintech firms and challenger banks will further exploit payment opportunities at point of sale in an increasingly cashless European society, and specifically using AI to take advantage of inefficiencies in cross border money transfer. With the value of global mobile payments expected to reach US$2.14 trillion in 2023, traditional players must look to follow these fast-paced innovative trends, as consumers and small businesses seek to maximise value from each payment.
The insurance sector must continue to improve the customer experience, offering more product and pricing transparency, and leveraging their substantial data capture capabilities to provide people with on demand and usage-based insurance. To read the full report please click here