Summary of The Future of Financial Services

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The Future of Financial Services summary
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Rating

8

Qualities

  • Innovative

Recommendation

For the financial services industry, change is coming fast and furiously. This thorough report by the World Economic Forum takes a look at the upheaval. The study draws no firm conclusions about exactly how the world of banking and finance might change, but it outlines possible outcomes for the banking, credit card, insurance, capital raising and investment industries. It examines a number of emerging and possibly disruptive technologies, including Bitcoin and PayPal, crowdsourcing, and peer-to-peer lending. The most likely scenario, the report seems to suggest, is that traditional financial institutions will have to adopt some of the new ideas. getAbstract recommends this presentation, written for the financial professional, to industry executives and investors.

About the Authors

The World Economic Forum is an independent global organization that engages leaders of business, politics, academia and society with the mission of improving the state of the world.

 

Summary

For the Financial Industry’s Incumbents, Change Is the New Normal

Financial institutions face a wave of change brought about by shifting consumer preferences and the rise of technology. Banks, credit card issuers and insurers already are adjusting the way they do business. While exactly how these disruptions will unfold is still unclear, the evidence shows that financial services companies will face ongoing pressure to keep pace in a fast-changing world. Innovative new entrants, including Bitcoin, PayPal and peer-to-peer lender Prosper, are poking and prodding the incumbents, looking for business opportunities created by “customer friction” and “pain points.” These challengers are nimble, tech-savvy and unencumbered by the legacy systems and bureaucracies that can make traditional financial enterprises slow to respond.

Electronic payments have been overtaking cash and checks for decades, starting with the creation of credit cards in the 1950s. By 2012, electronic transactions already made up 68% of the value of US payments. For consumers, electronic payments have proven convenient, and they also provide extra layers of protection against fraud and theft. Electronic...


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