This report is the first of a multi-part series that will cover our views on megatrends.
Banking - regulation to digitalisation
In the 10 years since the collapse of Lehman, more regulations were introduced to the banking sector to make banks safer. In particular, banks globally have adopted the Asian banking model which is funded by stable deposits. With regulations more or less in a steady state, banks in the next decade will embark on immense data/digital changes. In essence, banking will be very different 10 years down the road.
Rise of digital and data
With the rise of mobile/smart devices and social media, the last 10 years have seen the beginning of the Fourth Industrial Revolution. In the next 10 years, we will see the second order of these changes, impacting industries and organisations. Smart devices have also facilitated the aggregation of data and information, narrowing the distance between corporates and consumers. Instead of just looking at the demographics (age, gender, occupation, etc.) of customers to understand them, organisations have also started to collect psychographic information (values, interests, attitudes, etc.). Whether an organisation will be disrupted, interrupted or transformed will depend on their response to the changing operating environment.
Growing importance of ESG - Environment, Social and Governance
The adoption of ESG does not need to be a zero-sum game as it has been linked to improved financial performance. As greater emphasis is placed on sustainable practices, there are numerous market opportunities for businesses to leverage on in their sustainability journey.
Rise in anti-globalisation sentiment and US-China trade tensions
Two major events in 2016, specifically Brexit and Trump’s presidential campaign, have resulted in the build-up of anti-globalisation sentiments and heightened US-China trade tensions. The possibility of an increase in tariffs has led to a re-visitation of the global supply chain. Organisations across the globe can be seen responding through 3 key ways: (1) trade diversion; (2) product substitution; and (3) re-shoring to other parts of Asia, in particular, ASEAN.
In light of these megatrends, UOB has developed solutions to support your business. For more information on our banking solutions, please contact us here.