Financial markets exam questions - Based on the report you...

Info icon This preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Based on the report you have read on the outlook for global banking and capital markets, will banks be able to accelerate expense initiatives to offset weak revenues and drive improved RoE (Return On Equity) Based on the report on banking trends, choose 5 trends and explain why you feel these trends are important and will have an impact on banking The importance of Information Technology (IT) within the banking industry. Explain with particular emphasis on the digitization of branches and the “Fintech” explosion Trend 1: New entrants such as fintech firms Trend 2: Focus on innovation investments Trend 3: Security systems (Cyber threats increase) Trend 6: Investing in modern core banking solutions to transform legacy systems Trend 7: Distributed ledger 1. New entrants such as fintech firms will have the biggest impact on the banking industry. Non-banking service providers in the form of fintech players are causing disruption and disintermediation, often targeting discrete highly profitable segments of the banking value chain. The threat from fintech and other non-traditional players is looming and is expected to accelerate. Rapid adoption of technology by consumers is changing their needs and the way they interact with banks. As banks have been slow to respond to these changes, some non- bank players have grabbed the opportunity to meet rapidly evolving customer needs. These changes are resulting in disruption of the banking industry, as non-banks are now targeting their most profitable business segments. These firms are targeting different banking services such as payments, personal finance management, lending, investments, and core banking. Threat is highest for services in the payments and personal finance management domains followed by lending and investment businesses. Business growth opportunities and profit margins for banks are declining and customers are expecting higher levels of service from their banks. Evolving customer expectations are creating a need for innovative products and services. Smart phone applications for instance have changed the way banking services are used by customers. To provide enriching customer experience, banks need to prioritize and critically address the areas of digitization, agility, insights and data. In many cases banks are collaborating with fintech firms to develop and establish innovative products. Because these new entrants, the banking industry is feels threatened. The entrance of non-traditional players such as fintech firms is the cause of other major trends in the banking industry like the focus on innovative products, digital technologies to enhance customer experience and the investment in modern core banking solutions to transform legacy systems. Because this new entrants, the banking industry finally feels the need for innovation and change.
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
2.
Image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern