Building Block 1 – Relevance 2018-12-17T08:32:49+00:00

Building Block 1 – Relevance


  • To stay relevant financial services companies need to align culture with delivery and technology.
  • Fintechs and banks moving at two speeds. Often simultaneously within the same organisation.
  • A ‘no legacy dividend’ for fintechs is coming to an end.

2018 was a turning point for the financial services industry. And not only because it marks a decade since the Global Financial Crisis brought advanced world economies to a standstill.

Having re-built their balance sheets and restored the confidence of investors – global banking industry market capitalisation has grown nearly 50% since 2010 – banks have also fared well, surprisingly so, against a barrage of new competitors from every corner of financial services.

In the UK alone there have been applications for new banking licences from 37 retail “challenger” banks since the Prudential Regulatory Authority was established in 2013 to increase competition in UK retail banking.

Despite their recovery, industry revenue growth is slow – averaging 2% for the last five years according to McKinsey Panorama, a banking database, well below pre-crash averages of 5 to 6%. Bank valuations are also trading at a discount to peers in other industries going through their own digital disruption – from healthcare to energy, consumer goods companies and telcos.

What’s driving low investor confidence is more than just a period of unexciting results. In the decade since the crash, and despite weak growth, particularly across Europe, new entrant fintechs have proved that they’re here to stay.


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