Many different aspects came together for this post. First was reading this IBM report which talks about 4 things
1. That the global opportunity is large but not in the same old places,
2. Firms are not prepared to capture this emerging opportunity,
3. The business model executives generally believe is best may actually be the wrong bet and
4. The people side of financial markets firms may be getting short shrift
#1 no problems, we know that developed markets are generally flat to a few bps on growth. Most of the rapid growth is coming from the emerging markets hence the attraction of China, India, BRICS, etc. Whether or not the firms are prepared to capture this is again open to debate. See here for an explanation of what financial firms are doing, in a particular segment and I quote, "“Citi customers expect innovation in financial products and global consistency,” says Evans, who will oversee teams in the U.S., London and Asia. “We’ve been regionally silo’d in our approach until now with electronic execution as a business in the U.S. and alternative execution as a business in Europe so we’re working to bring that all together.” Evans explains that as electronic trading has matured in the U.S., there is a great opportunity to leverage the product and knowledge base built up and extend that out to Europe, Asia and beyond. “Even though the U.S. market place is the biggest market in terms of opportunity, the rate of change is not the same as it is now in Asia and Europe,” says Evans. He adds that with MiFID in Europe and Reg NMS in the U.S. he sees the markets starting to converge in terms of the way people trade. "
By the way, I used to work with Richard once upon a time when it was called as Schroder Salomon Smith Barney, now Citigroup Corporate and Investment Bank.
Then comes the question of whether financial institutions are organised in the right way. The idea seems to be that while banks think that universal banks are best, but the best returns are provided by specialised providers. I have spoken earlier about this aspect here.
Anyway, an interesting picture of the future based upon a big survey (and yes, i took part in it)
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