Since the global financial crisis in 2008, the world has become more economically savvy and is acutely aware of the interplay between global challenges and economic performance. These challenges are discussed at the annual meeting of the World Economic Forum in Davos. FAnews caught up with Nicolaas Kruger, Chief Executive MMI Holdings, to gain some insight about what was discussed this year.
The themes presented at the forum were all closely linked to the challenges already identified, and the position the world finds itself in.
It was very interesting that China emerged as a strong supporter of globalisation, at a time when both the UK and USA are starting to focus inward. Leaders and leadership styles have changed as has alliances between countries. China has certainly become a global super-power and the country’s achievements to uplift the poor are impressive. It is therefore possible that the financial services industry in China will become much stronger and play an increasingly global role over time.
“The exponential speed of change predicted at the 2016 Davos summit was illuminated by actual examples of technology advances in the areas of artificial intelligence, robotics, multiple digital applications, the Internet of Things, Drones, 3-D printing and multiple other instances. Some of these examples apply to the financial services industry, including the insurance industry. The financial services industry has to embrace these technological advances to ensure a sustainable future,” says Kruger.
The effect on financial services
It is not only the political landscape that has changed. Responsible leadership is about much more than policy decisions made by the President or Prime minister of a country. Business leaders and managers face leadership decisions every day of their life. The role of responsible leadership is just as important in companies as it is in the halls of government.
The financial services sector should also take account of increasing inequality. Business leaders have to find ways to practically support inclusive growth, for example by encouraging increased savings rates across all income groups. Inclusiveness is a significant challenge, not only in South Africa, but throughout the world.
The broker response
An encouraging theme at Davos was the improved perception of consumers about financial services firms, especially banks. The financial services industry should capitalise on this opportunity. All the technology advances of the fourth industrial revolution are potential opportunities for organisations in the financial services industry. “The advances are pervasive across all aspects of a financial services company’s business, and offer the potential to create entirely new business models, revenue streams and expense models. Because the changes are exponential, it is imperative for financial sector firms to move early enough to adopt technological advances and maximise value-creation, or risk being left behind,” says Kruger.
There are far too many opportunities for financial services companies to list, but it is clear that many of the opportunities are digitally enabled. However, it is very important to understand and ensure that personal interaction always remain part of the value propositions of financial services organisations. Digital enablement can be very valuable to improve client journeys and experience, but will not fully replace a personal touch. Human interaction and empathy therefore remain critical as part of digitally enhanced omni-channel strategies.
It was also clear that technological advances are accelerating changing client behaviour and needs. In response to ever-changing client needs, client-centric strategies that position clients at the centre of everything a financial services company does are now commonly accepted. Effective execution of client-centric strategies requires businesses to embrace technological advances and leverage partnerships in external ecosystems (including Fintech and Insurtech) to deliver excellent client experiences in an agile and flexible manner, at a high execution speed.
Small steps towards recovery are being made, all that needs to happen for insurers and brokers to embrace change and see in the context of benefitting their business. Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts email@example.com.