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A number of current crises are rapidly impacting the financial services sector landscape. Geopolitical instability, stagflation, and the changing interest rate environment are taking their toll on the industry. These factors make it extremely challenging to make decisions on future investments and safeguard the existing business. Against this dynamic backdrop, resilience and risk management have never been more crucial than today. However, with regard to the revived interest rate environment as well as the ongoing technology and sustainability transformation of the sector, the current market also offers opportunities for faster, more profitable growth. As inflation is driving up both administrative expenses and transformation costs, these increases need to be compensated by productivity and efficiency gains, thereby also helping financial services companies to bridge the talent gap.
To remain competitive in the long term, financial services providers need to invest into a core business strategy built around their USPs. On top of that, it is equally important to recruit and retain the best talent over the long term, and to build a strategic real-time risk management framework capable of coping with the multiple underlying geopolitical and macroeconomic forces. The basic preconditions for financial services providers to manage their transformation to customer-centric, platform-based business models are a willingness to make bold investment (and refinancing) decisions and a commitment to pursue efficient cost management.
We help our clients to be profitable and commercially viable, and to drive sustainable growth through transformation. We identify and strengthen their core capabilities, develop tailored business models, and support them in driving technological change. Our experts also leverage the broad cross-industry expertise within Strategy& to develop and implement ESG strategies for companies in the financial services industry.
Tapping into areas of innovation and achieving faster growth than the market are key for a growth transformation. Financial services providers can use this dynamic environment to convince their customers with innovative solutions and gain market share.
In light of increased inflation and demographic changes in the labor market, financial services providers need to increase their efficiency in order to regroup capital for future investments. To facilitate this, we factor in measures ranging from strategic cost reduction to efficiency enhancement via adjustments in the business portfolio.
Deals are an essential tool in the financial services sector’s transformation process to drive future growth, divest non-core businesses, sharpen corporate operational focus, or generate capital or liquidity.
Sustainability has become one of the key megatrends for the financial services industry, with transformation requirements for the sector that go far beyond regulatory considerations and processes. We develop sustainable business models that are designed for long-term market success and secure the future viability of financial services providers.
Our financial industry consulting team develops scalable, digital platforms that deliver personalized customer experiences and make organizations more agile and flexible. Financial services providers need the technological foundations and capabilities to successfully realize their growth ambitions and efficiency requirements.
Our financial services team has deep industry expertise in the insurance sector. With the acquisition in July 2021 of 67rockwell, a consulting firm specializing in insurance, we have further strengthened our positioning in this sector and expanded our existing service offering.
Driven by new consumer requirements, regulatory frameworks and technological opportunities, the insurance industry is facing major changes. Increased price sensitivity from customers, the omnipresence of comparison sites, and the market entry of new providers have significantly increased the competitive pressure on insurance providers in recent years. On top of that, the changing interest rate environment presents the industry with additional challenges, as does ongoing digitization. As such, it is now important for insurance companies to challenge their current business model, to realign their strategic focus, and to create digital service offerings.
We support our clients in overcoming these challenges, from strategy to execution. With our service offering, we help them to realize sustainable value and organizational change, to grow faster than the market.