Creating the Future of Global Financial Services

1. Creating the Future of Global Financial Services Ross Dawson Chairman, Future Exploration Network Author, Living Networks and Developing Knowledge-Based Client Relationships

3. Risk Relationships

4. Finite players play within boundaries Infinite players play with boundaries - James Carse

5. Scenario thinking Driving forces Critical uncertainties Scenarios for financial services Implications Opportunities

6. Scenario thinking Driving forces Critical uncertainties Scenarios for financial services Implications Opportunities

7. Scenario thinking Source: Shell Global Scenarios to 2025

8. Forecasting and scenarios

9. Thinking about the future of drilling Source: Global Business Network & Peter Schwartz

10. Life is full of surprises Source: Global Business Network & Peter Schwartz

11. Networks are based on standards Scenario Project - Process Map Future Vision Workshop Senior executive interviews Develop preliminary strategic frameworks Workshop preparation Explore past, present and future Catalysts for strategic conversation Growth and success Financial services Disruptions-trends -uncertainties Ongoing annual group and divisional scenario-based strategy process Responsiveness Strategic capabilities Develop scenario agenda Scenario thinking Drivers of alternative futures Group strategy implications Application in divisional strategy process Scenario team develops scenarios Preliminary scenario frameworks Scenario Book

12. Scenario thinking Driving forces Critical uncertainties Scenarios for financial services Implications Opportunities

13. Driving forces • Economic shift • Demographic shift • Greater expectations • Commoditization • Connectivity • Integration • Modularization • New payment mechanisms • New capital markets • Value of relationships

14. BRICs are overtaking Source: Goldman Sachs

15. Demographics is destiny

16. We expect more

17. Prices are being driven down Source: UK Office of National Statistics

18. Connected to financial advice

19. Integrated information flows

20. The modular economy

21. New payment mechanisms

22. New layers for capital markets

23. Relationships matter

24. Driving forces • Economic shift • Demographic shift • Greater expectations • Commoditization • Connectivity • Integration • Modularization • New payment mechanisms • New capital markets • Value of relationships

25. Scenario thinking Driving forces Critical uncertainties Scenarios for financial services Implications Opportunities

26. Critical uncertainties • Globalization • National stability • Regulation • Privacy • Volatility • Industry structure • New entrants • Currencies • IT Security • Climate change

27. Is globalization inevitable?

28. The integrity of nations

29. Regulation drives industries and economies

30. Privacy, service, and pricing

31. Will complexity drive volatility?

32. Industry consolidation

33. Banks get new competitors

34. How many currencies?

35. Will IT systems be secure?

36. The impact of climate change

37. Critical uncertainties • Globalization • National stability • Regulation • Privacy • Volatility • Industry structure • New entrants • Currencies • IT Security • Climate change

38. Scenario thinking Driving forces Critical uncertainties Scenarios for financial services Implications Opportunities

39. Key dimensions • Aggregation: • Fragmentation to Consolidation • Technology uptake: • Traditional to Transformational

40. Scenario Framework: Global Financial Services in 2020 Transformational New frontier Agent economy TECHNOLOGY UPTAKE AGGREGATION Fragmentation Consolidation Mega Services Barriers Rising Traditional

41. New frontier Agent economy TECHNOLOGY UPTAKE AGGREGATION Mega Services Barriers Rising

42. New Frontier • Strong global growth and availability of capital • Deregulation and international cooperation • India flourishes • Google, eBay, and telecoms firms become major financial players • Margin pressure across industry • Rise of mobile payments and e-cash • Shift away from branches • Intensely customized service to all tiers of clients

43. New frontier Agent economy TECHNOLOGY UPTAKE AGGREGATION Mega Services Barriers Rising

44. Barriers Rising • Rise of protectionism • China splinters • Euro breaks up • Wealth disparities rise • Investors demand focus • Banks specialize/ global monolines • Proliferation of intermediaries • High margins for successful players • Terrorism impacts financial markets and insurance

45. New frontier Agent economy TECHNOLOGY UPTAKE AGGREGATION Mega Services Barriers Rising

46. Agent Economy • Fluid global economy • Highly modular outsourcing across borders • Governments lose control/ consumers gain control • Consumers and business shift wholesale to online • Agents seek best price for everything/ customer loyalty nil • Constant product innovation • Markets are volatile • Customer service and call centers are automated

47. New frontier Agent economy TECHNOLOGY UPTAKE AGGREGATION Mega Services Barriers Rising

48. Mega Services • Rise of BRIC results in multiple superpowers • Trade liberalization wins • Global financial services consolidation • Integration across financial services sectors • Profitability high but cyclical • High customer expectations • Banks diversify into other personal services, partly through alliances • Niche service providers emerge to support the market leaders

49. Scenario Framework: Global Financial Services in 2020 Transformational New frontier Agent economy TECHNOLOGY UPTAKE AGGREGATION Fragmentation Consolidation Mega Services Barriers Rising Traditional

50. Scenario thinking Driving forces Critical uncertainties Scenarios for financial services Implications Opportunities