Do Financial Companies Know Their Information Balance Sheet?
23 1월 2013 - 11:44PM
Business Wire
According to global management consultancy Oliver Wyman, the
value in financial services is quickly shifting from balance sheets
and physical distribution to information. This trend is occurring
globally, but is perhaps most easily observable in US banking.
There, information businesses related to banking such as
independent payment networks, credit bureaus, ratings agencies,
exchanges, and data providers, among others, may be more valuable
than the industry’s traditional balance-sheet based businesses by
the end of the decade. Oliver Wyman’s annual State of the Financial
Services Industry 2013 report titled, A Money and Information
Business, finds that most financial services companies have an
opportunity to become information-driven companies that grow and
monetize their information assets. Firms that exploit this
opportunity will find areas to prosper even in the face of
challenging macroeconomic conditions and regulatory uncertainty. On
the other hand, firms that fail to identify how the evolving
information landscape is affecting their business could suffer from
a similar kind of disruptive change witnessed by the travel, media,
telecommunications and music industries.
Banks and insurers continue to control a unique and
extraordinarily valuable array of information assets. The 16th
annual Oliver Wyman report finds that once a firm understands its
information assets and how the evolving financial services
information landscape can help monetize those information assets or
threaten them, it can build what Oliver Wyman calls the
“information balance sheet”.
“We conceived the idea of the information balance sheet as a
mechanism by which executives can begin to get a grasp on their
information assets, exposures, opportunities and threats. In short,
it provides a framework to understand the aggregate impact of
information and inform on how changes in information are going to
change and affect earnings, as well as prioritize potential
investments in information,” said Aaron Fine, Partner at Oliver
Wyman and primary author of the report.
Other key findings of the report include:
- “Coopetition” between traditional
financial services companies and information companies may be among
the most dynamic forces in financial services going forward,
bringing together the complementary strengths and weaknesses of
partnering firms. Such partnerships can produce significant
tactical earnings opportunities in short periods of time.
- Digitalization and the free flow of
information have given clients in many areas a clearer view of the
cost associated with each component of what used to be bundled
services and the opportunity to be more selective in their
spending.
- “Information shocks”, defined as
changes in firm, competitor or client information-related behaviour
that have a significant impact on earnings, may affect earnings as
much as interest rate shocks and other macroeconomic factors. An
example of an information shock: clients becoming more price
elastic as the information environment evolves.
- Long-term success in using information
depends not on the number of “hits” but on the size of the
“misses”. Firms that hope to be successful must establish strong
controls that ensure they avoid critical mistakes.
“‘Money’ is a value business, ‘information’ is a growth
business. The value of money has never been lower and so financial
services firms that define themselves by their monetary balance
sheet will struggle to grow. Those that instead define themselves
by the growth potential of their information have a very different
future,” said Fine.
Key exhibits from the report include:
- Market Capitalization of US Banks vs.
Bank-Related Information Businesses
- The Rise of Information
- The Shifting Balance of Money and
Information
- Impact of the Changing Value of
Information and Money on Financial Services Margins
- The Economy Viewed Through Financial
Services Data
- Potential Information Opportunities
from Consumer Deposit and Payment Data
- Information Opportunities Across
Financial Services
- Strategic Threat #1-Cooperation with
Information Companies Reduces Barriers to Entry and Opens the Door
to Greater Competition
- The Global Financial Services
Information Company Landscape
- Strategic Threat #2-Value Migration
from Traditional Players to Information-Driven Companies (Global
Telecom)
- The Information Balance Sheet (for an
Illustrative Firm)
- Information Tactics Archetypes
- Information-Driven Banking and
Insurance – Example: Advanced SME Lending & Support
The Oliver Wyman State of the Financial Services Industry 2013
report is available
at:http://www.oliverwyman.com/state-of-financial-services-2013.htm
.
About Oliver Wyman
Oliver Wyman is a global leader in management consulting. With
offices in 50+ cities across 25 countries, Oliver Wyman combines
deep industry knowledge with specialized expertise in strategy,
operations, risk management, and organization transformation. The
firm's 3,000 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.
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