Search DubaiPRNetwork.com

Home >> Banking & Investments

Financial Institutions Can Out-Innovate Fintechs Through Greenfield Approach, According to Oliver Wyman

Tuesday, January 22, 2019/ Editor -  

Share

Home >> Banking & Investments
Annual State of Financial Services Report “Time to Start Again” Released at Davos
 
Dubai, United Arab Emirates, January 22, 2019 –   The next big wave of innovation in financial services will be driven by incumbents starting with a blank canvas, according to Oliver Wyman’s 2019 State of Financial Services report titled “Time to Start Again” launched today at the World Economic Forum Annual Global Meeting in Davos.
 
The report describes an emerging new approach – “Greenfield” – where existing firms break free from the constraints of their legacy systems, business and talent models. It is based on new subsidiaries, new technology, and new customer solutions.
 
“For an industry whose product - the movement and storage of money – is electronic, the processes are still far too manually intensive” said Ted Moynihan, Managing Partner and Global Head, Financial Services, Oliver Wyman. “Established firms will look to free themselves from the shackles of their legacy infrastructure and embark on future journeys unencumbered.”
 
Examples are beginning to be rolled out. RBS Group will soon launch Bó, a greenfield digital offering, built with new technology in under 12 months. National Australia Bank (NAB) has had success with QuickBiz, a fully digital unsecured lending solution, and German insurer ERGO has built Nexible as a challenger to its existing auto-insurance business. Goldman Sachs launched Marcus in the US and Europe, allowing it to enter consumer banking.
 
The Power of New
 
Digital challengers are providing the inspiration and motivation for existing firms to embark on new builds. South Korean digital bank Kakao attracted 6 million signups in less than a year. Monzo, Revolut, and others in the UK grew their customer base from 0.6 to 2.5 million customers in a year. In the US, Chime has opened more than 2 million no-fee transaction accounts. In the foreign exchange market, XTX gained 10 percent market share in just three years, making it the second-largest player in 2018.
 
Some of these businesses may not yet be profitable, but over time the digital challengers and greenfield businesses will use what the report calls “flywheel momentum,” collecting more data, developing new propositions with that data, and attracting more talent. 
 
Enter Existing Financial Services Firms
 
To be successful in the future, financial institutions need to have the same advantages as digital challengers. For example, the average number of customers each person in a challenger bank serves is over 2,500, compared to 1,000 in existing banks. Digital challengers launch new products or services in two weeks, compared to three to six months release timetables for traditional firms. 
 
Greenfield is an attempt to deliver a customer offering to match or exceed the challengers. Using modern technology, an open platform, and third-party services, new banking and insurance platforms can be built within a year, at a cost of between $10 million and $60 million. Financial services firms will hope to outcompete fintechs with greenfield platforms, while having the advantage of tremendous resources and an existing customer base from day one.
 
In the process, the new greenfield businesses will help catalyze and drive change across the organization. “The new will transform the old and create a better financial system overall”, concluded Moynihan.
 
The Oliver Wyman Time To Start Again report is available here. This year’s report is broken into four segments: The Power of New, How the New Can Transform the Old, The Greenfield Approach and Flywheel Momentum.  The report features the first in-depth interview with Mark Bailie, former Group COO of Royal Bank of Scotland and current CEO of Bó.  
 
Key exhibits from the report include:
  • Exhibit 1: The Impact of New Business Models 
  • Exhibit 3: Introducing Greenfield
  • Exhibit 4: The Old vs. The New
  • Exhibit 10: A Year in the Life of a Greenfield Build

Previous in Banking & Investments

Next in Banking & Investments


Home >> Banking & Investments Section

Latest Press Release

Dp World, UAE Region and Jafza Unlocking Potential in New Markets for Indian Exp ...

Dubai Cares teams up with ENOC to get 10,000 children from low-income families a ...

Etihad Airways Celebrates 15 Years in India

Cap on sulphur emissions to drive global demand for LNG as shipping fuel

Discovery Powers Mobile Malaria Research

American Aesthetic Medical Center on empowering spree to celebrate Emirati Women ...

GUESS – The Red and Black Trend

NYU Abu Dhabi researchers find warm ocean water, exacerbated by warmer air, is c ...

GEMS Education's GCSE students celebrate outstanding results

Robotics & Automation to transform Middle East's warehousing & inventory control ...

Ericsson announces changes to the Executive Team

Ikea 2020 Catalogue Launches With a Fresh Start

Epson announces its first 24-inch dye sublimation printer, the SureColor SC-F500

The Boot Edit

Comments of Dr Azad Moopen, Founder Chairman and Managing Director, Aster DM Hea ...

Shaza Hotels Expands Presence in UAE with the Opening of Al Badayer Oasis – A Sh ...

Al-Futtaim Engineering and Technologies signs up as strategic corporate partner ...

UAE Team Emirates Heads to Germany for Euroeyes Cyclassics Hamburg and Deutschla ...

Ma'an Rolls Out New Program to Get Abu Dhabi Community Involved in Making a Soci ...

GEMS Education student is the first UAE qualifier for trials to India's FIFA U17 ...