How can financial services neutralise recent protectionism trends?
Since the financial crisis, we have been experiencing an increasing trend of protectionism causing de-globalisation across different industries such as carmakers, healthcare, consumer goods producers, and financial services firms.
One of the most affected industries by this protectionism trend is the financial industry. According to the European Central Bank report published in August 2016, cross-border capital flows had reached a peak around 14% of global GDP in 2007 then went through a steep decline in 2008 making only 5% of global GDP.
In the UK economic scene, Brexit is considered an advanced form of the recent global protectionism. Financial services firms are considered as the sector where Brexit will cause many negative implications.
In order to neutralise the negative impact caused by Brexit, and turn it into opportunities, it is crucial to monitor the most critical key areas in any corporation such as; strategy, operations and IT.
Financial services strategists should put into practice their knowledge to better manage these changes and develop a strategic growth plan for further opportunities with the minimum disruption to “business as usual”.
The main areas to focus on by financial services firms:
1. Change Management
Only a multidisciplinary team will be capable to deliver a range of risk-free strategies from process improvements to corporate restructure maintaining the existing business undisrupted during the transition period.
2. Data Management
Experienced IT engineers can build strategies to meet the existing requirements of the current General Data Protection Regulation and adapt businesses to the new data regulation to be ruled by the UK government.
3. Digital Leadership
Leaving the European Union means UK-based companies will no longer have access to the Single Digital Market, therefore, financial operators need extensive experience to minimise the impact and grow internationally. Digital leaders of the industry must be able to implement long-lasting IT solutions by leveraging new technological tools.
4. Innovation
Today’s global market status is highly ambitious. To gain a competitive advantage, financial services firms must innovate by re-engineering processes, and find new business insights. Financial strategists should be committed to introduce “Innovation as a Process” and provide their hands-on knowledge to develop data analytics and learning machines. Forward-thinking experts will adapt businesses’ speed to the last fintech applications.
5. Strategy
Financial planners should be dedicated to deliver a successful framework for a continuous growth by finding new business insights that create financial value. Strategies are designed accordinging to economies of scale in both operational costs and financial resource costs to succeed nationally and expand internationally.
Protectionism trends will not end simply opposing their campaigners but will end when the entire society gets together to sort out its problems in the global eco-system. In the meanwhile, all industries should show their readiness for any change to be dealt with in the short and long term. Financial services firms can show their leadership to take positive initiatives and lead other industries during the current uncertainties.