The future of financial services
Financial services have become a major component of western society. Today, the key questions for financial services professionals, as well as their customers, are whether this level of activity constitutes a bubble or whether it is sustainable. What will the industry look like in 10, 20 or 40 years time?
In 2012, we published a report called “In Safe Hands? the future of financial services” with Long Finance. This looked at the forces which would shape financial services through to 2050 and potential scenarios which might evolve. The report can be found on the SAMI web site: www.samiconsulting.co.uk/5insafehands.pdf
We developed four scenarios built on the best forecasts for 2050 in terms of population and the use of technology. Additionally, the report explored the imponderables: how will society organise itself, and what might be the role of financial services, within these scenarios?
Our thinking about the world in 2050 started with the geopolitical context:
- Will the Washington consensus survive to 2050?
- What could cause it to break?
- If it does break, what will replace the international organisations and the values of the Washington consensus?
Recent discussions about the likelihood of another “2008” prompted us to take another look now, 4 years later – what has change? What did we get right? In a blog in the Long Finance pamphleteer series
we look at some of the areas where we were right – e.g. geopolitical – where the jury is still out – e.g. long term change in the insurance market – and where we underestimated the nature and pace of what was happening – the effect of technology. We did not anticipate the pace of technology driven change in financial services, with peer to peer lending becoming an accepted part of the landscape, and Blockchain offering revolutionary transaction speeds and costs. The impact of both has still to be felt – a good discussion of the second is by Chris Skinner in “ValueWeb, How fintech firms are using mobile and blockchain technologies to create the Internet of Value (ISBN: 9789814677172)”
We are holding a short workshop to explore in particular some of the implications of Blockchain – what are the implications if financial transactions are free and instantaneous?
 http://www.cid.harvard.edu/cidtrade/issues/washington.html We use Washington consensus to mean the collection of policies identified by Rodrik (2001) which include, for instance, financial codes and standards.
Gill Ringland, SAMI Fellow and CEO.
The views expressed are those of the author and not necessarily of SAMI Consulting.