Oliver Wyman Logo
2016-01-20 10:35
Modular Financial Services: The New Shape of the Industry
  • Oliver Wyman report identifies $1 trillion of banking and insurance revenues and costs to shift
NEW YORK & DAVOS, SWITZERLAND--(Business Wire/Korea Newswire) January 20, 2016 -- 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. This is according to Modular Financial Services: The New Shape of the Industry, a new report by global management consultancy Oliver Wyman.

The Oliver Wyman study estimates that this change could see $1 trillion of revenues and costs shift in banking and insurance, an industry with $5.7 trillion of revenues today. New customer platforms could capture $50-150 billion of revenues from today’s banking and insurance markets, equivalent to several eBays or 1-2%+ of banking and insurance revenue today.

Consumers will benefit most from modular financial services. They will be able to access a wider range of product providers, and the increase in competition will drive margin compression. The report estimates that $150-300 billion of value may migrate to consumers by way of lower prices. Innovative business models based on new technology will capture share, with the potential to capture a further $150-250 billion of existing revenues.

“Modular financial services are emerging at different speeds across markets. Currently, banking in the US is more modular than in Europe and Asia. Property & Casualty insurance has become more modular than Life insurance. Now, the modular industry structure will go deeper and spread to new markets,” said Oliver Wyman Partner and co-author, Matt Austen. “Since the crisis, most firms have focussed on optimising their existing, integrated business model. Now, the industry is going to move towards a new, modular structure.”

The report highlights that large, integrated financial services firms still enjoy significant competitive advantages -- including existing customer relationships, secure at-scale operations and meeting the requirements of regulatory compliance -- and are still well-positioned to succeed. However any costly, inflexible legacy infrastructure will be unsustainable and competition will force a significant overhaul of incumbents’ operating platforms. The report estimates target cost savings for the world’s largest banks may need to be as much as $340 billion. The cost of “replatforming” the world’s largest banks is substantial, potentially more than $4 billion each, larger than the average annual dividend paid by the 100 largest universal banks of $1.7 billion.

Oliver Wyman’s Managing Partner for Financial Services, Ted Moynihan, added: “Even if we do not expect a completely modular financial services sector, the way customers buy financial services and how firms deliver them is going to be transformed.”

The Oliver Wyman Modular Financial Service report is available here.

About Oliver Wyman

Oliver Wyman is a global leader in management consulting. With offices in 50+ cities across 26 countries, Oliver Wyman combines deep industry knowledge with specialized expertise in strategy, operations, risk management, and organization transformation. The firm's 3,700 professionals help clients optimize their business, improve their operations and risk profile, and accelerate their organizational performance to seize the most attractive opportunities. Oliver Wyman is a wholly owned subsidiary of Marsh & McLennan Companies [NYSE: MMC]. For more information, visit www.oliverwyman.com. Follow Oliver Wyman on Twitter @OliverWyman.

View source version on businesswire.com: http://www.businesswire.com/news/home/20160119006902/en/
Oliver Wyman 전체 보도자료 보기
이 뉴스는 기업·기관이 발표한 보도자료 전문입니다. 언론 매체와 블로그는 보도를 목적으로 이 보도자료를 사용할 수 있습니다. 보도자료 등록 안내
Media Contact

Oliver Wyman
Media
Gregor Ridley
+44 20 7852 7140
gregor.ridley@oliverwyman.com

Jung Kim
+1 646 364 8355
jung.kim@oliverwyman.com

이 보도자료 관련 분야

경제  컨설팅  조사연구  해외

관심 분야 보도자료 구독 방법

가입하면 관심 분야 보도자료를 마이 뉴스와 이메일로 볼 수 있습니다. 스마트폰과 RSS로도 가능합니다.

보도자료 배포 서비스 안내

뉴스와이어는 4천여개 언론매체에서 일하는 1만7천여명의 기자에 보도자료를 배포해 언론이 보도할 수 있게 합니다.

해외 보도자료 배포 안내
비즈니스와이어와 제휴해 해외 언론에 보도자료를 배포합니다.