Many citizens in the Middle East, Africa and South Asia (MEASA) region lack standard identification documents such as passports, or the credit data needed to secure loans. However, technological innovations are presenting new opportunities to collect, validate and store client information that are driving efficiencies and reducing costs for financial institutions.
17023
Related content
Financial Services
The Next Frontier: The future of finance in the Middle East, Africa and Sou...
The Middle East, Africa and South Asia (MEASA) region is already poised to shape financial innovation. With a combined population of over 3bn, deepening mobile connectivity, and growing prominence as a trade and investment hub, MEASA will be a source of both demand and supply for more and better financial services. For companies that move quickly, this is a multi-billion-dollar opportunity to bank on the future of a diverse region.
Some firms are at the vanguard of financial innovation, using smarter business models and the latest technologies. The rise of “challenger” providers—often from different industries, such as telecommunications and e-commerce—is bringing even more varied financial services offerings to a far larger community of individuals and businesses. This report, which draws on expert interviews and country analysis, assesses the state of finance in MEASA, the factors shaping the future of key financial subsectors, and the regulatory framework and best practices required to enable the delivery of these services.
Key findings of the report:
Gaps in financial services present an opportunity for financial companies—both traditional and nontraditional players. A growing young population across MEASA is increasing demand for digitally delivered financial services. In addition to this, women’s access to finance substantially lags behind that of men, particularly among low-income groups, as regulatory requirements for accessing formal finance, such as official ID or billing documentation, create bias against them. Even among wealthier segments of the population, many individuals remain underbanked. Taken together, this untapped potential presents an attractive opportunity for companies providing financial services. As trade and investment increase in the MEASA region, there will also be a growing market for wholesale banking and capital markets.
Overcoming a strong preference for cash in the MEASA region will be imperative to move towards a cashless economy. Across the region, the majority of utility bills, school fees and even wages are paid in cash. Building trust in digitally delivered finance will take time, despite a growing preference for it among the younger generation. A fully cashless economy may be decades away.
Blockchain has the potential to change the financial architecture in MEASA, particularly for banking. Blockchain is helping to reduce high money-transfer and exchange costs by bypassing intermediaries, and blockchain-based digital registries could tackle other problems, like land expropriation. While these applications are experimental and pose regulatory difficulties, the core technologies can help to overcome some of the challenges of the existing financial system, such as money-laundering and corruption in a cash economy. More importantly, they are expected to reduce costs for financial institutions, particularly around compliance with anti-moneylaundering (AML) and Know Your Customer (KYC) rules.
New business models are being developed to reach the “missing middle” of retail investors and medium-sized businesses. The rise in equity crowdfunding platforms and lower-cost portfolio investment products is unleashing new capital for entrepreneurs and businesses, and is giving middle-and lower-middle-income citizens the ability to become investors. Growth in the provision of credit, an increasing interest in private equity and a rise in venture capital are also helping to drive growth in the middle market.
In Islamic finance, the approach is shifting from “sharia-compliant” to “sharia-based”. The approach to Islamic finance thus far has been to adapt existing products and services so that they comply with sharia law, for instance eliminating interest charges on credit cards and loans. Enabled by technology, companies are now developing fresh products and services that follow the spirit rather than adhering strictly to the letter of sharia principles.
Governments and regulators have a crucial mandate to drive financial innovation. Governments and regulators must ensure that regulation keeps pace with advances in technology in the financial sector. There are examples across MEASA of legislation that enables a wider array of providers to enter financial services, from postal systems and telecoms companies to e-commerce platforms. Developing regulation around the latest developments, such as blockchain, will prove challenging, but governments in the region are adopting strategies to test the water. Other key roles including increasing financial literacy to ensure that widening access to finance does not lead to debt spirals, and ensuring that government payments systems are also digitised and technologically advanced, to help drive the shift away from cash.
The shifting landscape of global wealth: Future-proofing prosperity in a ti...
In some instances the impact of this shift will be shaped by local factors, such as demographic changes. In other instances this shift will reflect shared characteristics, as demonstrated by the greater popularity of overseas investing among younger high-net-worth individuals (HNWIs) brought up in an era of globalisation. Whatever the drivers, the landscape of wealth is changing—from local to global, and from one focused on returns to one founded on personal values.
Despite rising economic concerns and a tradition of investor home bias in large parts of the world, the new landscape of wealth appears less interested in borders. According to a survey commissioned by RBC Wealth Management and conducted by The Economist Intelligence Unit (EIU), younger HNWIs are substantially more enthusiastic about foreign investing. The U.S. is a particularly high-profile example of a country where a long-standing preference for investments in local markets appears set to be transformed.
Click the thumbnail below to download the global executive summary.
Read additional articles from The EIU with detail on the shifting landscape of global wealth in Asia, Canada, the U.S. and UK on RBC's website.
To better understand the opportunities and challenges in developing a fintech business in seven ASEAN markets, The Economist Intelligence Unit conducted wide-ranging desk research supplemented by seven in-depth interviews with executives in Australia and ASEAN.
Download report and watch video interview to learn more.
The Middle East, Africa and South Asia (MEASA) region is already poised to shape financial innovation. With a combined population of over 3bn, deepening mobile connectivity, and growing prominence as a trade and investment hub, MEASA will be a source of both demand and supply for more and better financial services. For companies that move quickly, this is a multi-billion-dollar opportunity to bank on the future of a diverse region.
Related content
17022
Financial Services
Innovations in Identity in Financial Services
Many citizens in the Middle East, Africa and South Asia (MEASA) region lack standard identification documents such as passports, or the credit data needed to secure loans. However, technological innovations are presenting new opportunities to collect, validate and store client information that are driving efficiencies and reducing costs for financial institutions.
Following the financial crisis of 2008-09, financial institutions have tightened lending in markets across the MEASA region. In parallel, rules on money-laundering, bribery and terrorism-related financing have also become stricter, making lenders more reluctant than ever to take risks. This has led financial companies to focus on clients that they consider “safe”.
While well intentioned, financial reforms and more stringent Know Your Customer (KYC) rules make it costly to process individuals and businesses, particularly small and medium-sized enterprises (SMEs), which often lack formal accounts or official documentation. “KYC is quite a cumbersome activity,” says Lutfi Zakhour, financial services lead at Booz Allen Hamilton, a consultancy. The process starts with the collection of documents at a branch, he explains, and the bank then has to validate these, conducting enhanced due diligence on high-risk accounts. This information not only has to be stored securely, but must be updated regularly. “This is time-consuming, for bank staff or financial institutions in general, and for consumers.” Applicants may be rejected because the risks are not worth the financial reward, which further widens the lending gap in emerging markets.
There are better ways to balance compliance with financial deepening. “Although they’re spending billions of dollars already on KYC-related technology and upgrades, banks still recognise that they have a lot more to do,” says Susan Starnes, head of strategy, trade and supply-chain solutions at the International Finance Corporation (IFC), part of the World Bank. A growing army of technology firms—and some banks—are using algorithms, machine learning, blockchain and biometrics to help. These technologies are being applied to securing and storing information on clients and assessing creditworthiness.
However, particularly in emerging economies, there is a chronic shortage of necessary investment to build transport, communications, energy and water infrastructure. In the Middle East, Africa and South Asia (MEASA) region, the funding deficit amounts to over US$500bn annually.
Domestic sources of capital—the mainstay of infrastructure development in emerging markets—fall short, owing to fiscal pressures from the chronic deficits run by many countries in the MEASA region, or because of the risk of overindebtedness arising from excessive borrowing. Similarly, funding from multilateral development banks (such as the World Bank), regional development banks (such as the Africa Development Bank and India’s Infrastructure Development Finance Company) and country donor partners (notably China) cannot hope to close the investment gap completely. Fresh sources of funding and new funding mechanisms will be essential if governments are to make progress in addressing their countries’ infrastructure needs by building roads, connecting populations to power, and providing clean drinking water and sanitation.
In the MEASA region, when infrastructure is not paid for directly by governments themselves, it is primarily financed by banks, rather than through capital markets or public-private partnerships (PPPs). “But we think that those conditions are changing and that the region will be less reliant on bank financing for infrastructure in the future,” says Michael Grifferty, president of the Gulf Bond and Sukuk Association. He cites several reasons for this. Among them is the mismatch of timelines between infrastructure projects and banks: banks prefer shorter-term debt to meet short-term obligations. In addition to this, regulatory changes such as concentration limits and those stemming from Basel III, such as increasing minimum capital-adequacy ratios, may constrain growth in banks’ balance sheets. “Enforcement of banking regulation will inadvertently result in pushing some financing towards capital markets,” says Mr Grifferty. Such shifts will create an opportunity for greater use of PPPs, capital markets, and alternative sources of finance such as pension funds and insurance companies that value predictable long-term income.
The shifting landscape of global wealth: Future-proofing prosperity in a ti...
In some instances the impact of this shift will be shaped by local factors, such as demographic changes. In other instances this shift will reflect shared characteristics, as demonstrated by the greater popularity of overseas investing among younger high-net-worth individuals (HNWIs) brought up in an era of globalisation. Whatever the drivers, the landscape of wealth is changing—from local to global, and from one focused on returns to one founded on personal values.
Despite rising economic concerns and a tradition of investor home bias in large parts of the world, the new landscape of wealth appears less interested in borders. According to a survey commissioned by RBC Wealth Management and conducted by The Economist Intelligence Unit (EIU), younger HNWIs are substantially more enthusiastic about foreign investing. The U.S. is a particularly high-profile example of a country where a long-standing preference for investments in local markets appears set to be transformed.
Click the thumbnail below to download the global executive summary.
Read additional articles from The EIU with detail on the shifting landscape of global wealth in Asia, Canada, the U.S. and UK on RBC's website.
China leads Asia’s diverse digital banking markets
If you want to see what universal digital banking looks like, skip Silicon Valley or London’s fintech hubs. China’s Alipay and WeChat Pay show how to do smart, mobile-based banking on a massive scale. Regulators are now adapting to new customer demands.
17019
Related content
Financial Services
Whose customer are you? The Reality of Digital Banking in Latin America
Banking with a social cause
Latin American banks and fintechs are racing to lower costs and access for the unbanked millions.
Just over half of all Latin American adults now have bank accounts. But credit and debit card ownership and usage lag that in the US and Europe. This has a subsequent effect on e-commerce purchases: 41% of internet shoppers paid cash on delivery last year.
However, an increasingly confident fintech sector that puts simplicity, low cost and social inclusion at the top of the agenda means that digitisation is a tool for improving access and equality in Latin America. Banks have responded by accelerating their digitalisation strategies.
Much of this regional change is being driven by changing customer behaviour and demands—often at a phenomenal pace.
But with over 200m potential new customers also at stake, Latin American banks see a bigger impact coming from new entrants than their peers see in the rest of the world (48% v 36% globally).
However, for the established banks, new payment players are the biggest threat, according to 51% of respondents. This is followed by neo-banks (23%), which offer bank-like transaction services without a full service current account.
Mobile money operators have also taken root in Latin America, with the number of registered accounts growing by 35% in the year to December 2016. Yet, just 10m mobile money accounts were active at the end of that year, leaving many consumers still without the means to make online, mobile or point-of-sale payments electronically. Accordingly, just 21% of Latin American bankers think that non financial firms, such as telecommunications or retailers, could become the biggest competition threat by 2020.
Whose Customer are you? The Reality of Digital Banking
This report, the fifth in The Economist Intelligence Unit’s series on the future of retail banking, marks a significant shift in the strategic concerns of banking executives worldwide. Previous reports tracked the shift in customer expectations and its likely impact on distribution and product design. Now the focus is firmly on implementing open banking and dealing with its consequences.
Technology and digital are now bigger—and more important—trends than regulation. Changing client demand, the rise of the smartphone and the introduction of new digital technologies have replaced post-financial crisis regulation as the drivers of strategic thinking at banks around the world. Integrating open banking that allows apps to initiate payments and other financial transactions is core to adapting to the digital banking age.
No single digital strategy suits every bank in every market. Respondents say their banks are adopting different strategies. While 61% want to develop niche propositions, others are, to varying degrees, opening up and giving access to new third parties. Some banks will view regulatory and technological change as opportunities to recreate themselves and build new ecosystems, while others may simply comply with emerging norms and regulations by granting access to customer data and payments via competitors’ smartphone apps. Going with the easiest options may leave banks, and their products, at risk of being assimilated, aggregated and unbundled by agile competitors, leading to a loss of brand and product visibility.
Banks must become more agile. The development of agile products requires improved organisational agility as well. According to 52% of survey respondents, product agility is now their top strategic priority. New payment players and the likes of Google, Apple, Facebook and Amazon, collectively known as GAFA, know what their clients want and are able to adapt quickly. Banks have to keep up, restructuring their business models to ensure that new products and features can be integrated quickly across physical and digital channels.
The impact of open banking and tighter security and data rules—and the conflicts between them—do not appear to be fully understood. While 71% of respondents are focusing their digital investment on cyber security, only 17% are concerned about a third-party relationship vulnerability being exploited as a result of open banking. The biggest danger to a sustainable banking model is the loss of valuable data on customers’ lifestyles and needs. Without that insight, all banks will struggle to upsell more profitable loan, investment and retirement products.
Customer and regulator concerns about data security may limit some of the big banks’ ambitions. The larger banks can take the fintechs on by building all-encompassing platforms that offer a seamless interaction with other products, services and comparison tools. Offering greater functionality means banks can learn more about customer needs and tailor new products to match.
Artificial intelligence and chatbots have a role in customer services, authentication and fraud, but banks are taking a cautious line as they do not want to lose their customers’ trust. Just over 20% of respondents think artificial intelligence (AI) will improve the user experience. However, banks need to appease customers’ uncertainty about the security of their personal information and how these data about them may be used. They will need to do this while maintaining a frictionless user experience that still takes into account individuals’ needs.
The shifting landscape of global wealth: Future-proofing prosperity in a ti...
In some instances the impact of this shift will be shaped by local factors, such as demographic changes. In other instances this shift will reflect shared characteristics, as demonstrated by the greater popularity of overseas investing among younger high-net-worth individuals (HNWIs) brought up in an era of globalisation. Whatever the drivers, the landscape of wealth is changing—from local to global, and from one focused on returns to one founded on personal values.
Despite rising economic concerns and a tradition of investor home bias in large parts of the world, the new landscape of wealth appears less interested in borders. According to a survey commissioned by RBC Wealth Management and conducted by The Economist Intelligence Unit (EIU), younger HNWIs are substantially more enthusiastic about foreign investing. The U.S. is a particularly high-profile example of a country where a long-standing preference for investments in local markets appears set to be transformed.
Click the thumbnail below to download the global executive summary.
Read additional articles from The EIU with detail on the shifting landscape of global wealth in Asia, Canada, the U.S. and UK on RBC's website.
In May 2017 the International Accounting Standards Board (IASB) released its long-awaited International Financial Reporting Standard 17 (IFRS 17 or the Standard). This marked the end of a multi-year process to produce the first comprehensive IFRS guidance for insurance contracts. This Standard is effective January 1st 2021*, and replaces the current interim regulation, IFRS 4, which has, for the past decade, grandfathered prior accounting practices while the IASB was busy producing IFRS 17.
The shifting landscape of global wealth: Future-proofing prosperity in a ti...
In some instances the impact of this shift will be shaped by local factors, such as demographic changes. In other instances this shift will reflect shared characteristics, as demonstrated by the greater popularity of overseas investing among younger high-net-worth individuals (HNWIs) brought up in an era of globalisation. Whatever the drivers, the landscape of wealth is changing—from local to global, and from one focused on returns to one founded on personal values.
Despite rising economic concerns and a tradition of investor home bias in large parts of the world, the new landscape of wealth appears less interested in borders. According to a survey commissioned by RBC Wealth Management and conducted by The Economist Intelligence Unit (EIU), younger HNWIs are substantially more enthusiastic about foreign investing. The U.S. is a particularly high-profile example of a country where a long-standing preference for investments in local markets appears set to be transformed.
Click the thumbnail below to download the global executive summary.
Read additional articles from The EIU with detail on the shifting landscape of global wealth in Asia, Canada, the U.S. and UK on RBC's website.
To better understand the opportunities and challenges in developing a fintech business in seven ASEAN markets, The Economist Intelligence Unit conducted wide-ranging desk research supplemented by seven in-depth interviews with executives in Australia and ASEAN.
Download report and watch video interview to learn more.
Because governance metrics vary among companies and encompass qualitative issues like independence and accountability, investors and boards are still learning how to clearly convey and analyze governance indicators. However, with increased data capabilities, driven by new technologies and a culture of transparency, investors and boards are beginning to better understand and act on governance issues.
Fundamentals of governance
17016
Related content
Financial Services
The shifting landscape of global wealth: Future-proofing prosperity in a ti...
In some instances the impact of this shift will be shaped by local factors, such as demographic changes. In other instances this shift will reflect shared characteristics, as demonstrated by the greater popularity of overseas investing among younger high-net-worth individuals (HNWIs) brought up in an era of globalisation. Whatever the drivers, the landscape of wealth is changing—from local to global, and from one focused on returns to one founded on personal values.
Despite rising economic concerns and a tradition of investor home bias in large parts of the world, the new landscape of wealth appears less interested in borders. According to a survey commissioned by RBC Wealth Management and conducted by The Economist Intelligence Unit (EIU), younger HNWIs are substantially more enthusiastic about foreign investing. The U.S. is a particularly high-profile example of a country where a long-standing preference for investments in local markets appears set to be transformed.
Click the thumbnail below to download the global executive summary.
Read additional articles from The EIU with detail on the shifting landscape of global wealth in Asia, Canada, the U.S. and UK on RBC's website.
To better understand the opportunities and challenges in developing a fintech business in seven ASEAN markets, The Economist Intelligence Unit conducted wide-ranging desk research supplemented by seven in-depth interviews with executives in Australia and ASEAN.
Download report and watch video interview to learn more.
The Economist Intelligence Unit undertook a study of high-net-worth women and men (individuals with US$1 million or more in assets), sponsored by RBC Wealth Management. The survey covered 1,051 individuals (502 women and 549 men) in Canada, the U.S., the UK and Asia (mainland China, Hong Kong, Singapore).
Related content
Financial Services
The shifting landscape of global wealth: Future-proofing prosperity in a ti...
In some instances the impact of this shift will be shaped by local factors, such as demographic changes. In other instances this shift will reflect shared characteristics, as demonstrated by the greater popularity of overseas investing among younger high-net-worth individuals (HNWIs) brought up in an era of globalisation. Whatever the drivers, the landscape of wealth is changing—from local to global, and from one focused on returns to one founded on personal values.
Despite rising economic concerns and a tradition of investor home bias in large parts of the world, the new landscape of wealth appears less interested in borders. According to a survey commissioned by RBC Wealth Management and conducted by The Economist Intelligence Unit (EIU), younger HNWIs are substantially more enthusiastic about foreign investing. The U.S. is a particularly high-profile example of a country where a long-standing preference for investments in local markets appears set to be transformed.
Click the thumbnail below to download the global executive summary.
Read additional articles from The EIU with detail on the shifting landscape of global wealth in Asia, Canada, the U.S. and UK on RBC's website.
To better understand the opportunities and challenges in developing a fintech business in seven ASEAN markets, The Economist Intelligence Unit conducted wide-ranging desk research supplemented by seven in-depth interviews with executives in Australia and ASEAN.
Download report and watch video interview to learn more.
Latin American banks and fintechs are racing to lower costs and access for the unbanked millions.
Just over half of all Latin American adults now have bank accounts. But credit and debit card ownership and usage lag that in the US and Europe. This has a subsequent effect on e-commerce purchases: 41% of internet shoppers paid cash on delivery last year.
16994
Related content
Financial Services
Whose customer are you? The reality of digital banking in Asia-Pacific
China leads Asia’s diverse digital banking markets
If you want to see what universal digital banking looks like, skip Silicon Valley or London’s fintech hubs. China’s Alipay and WeChat Pay show how to do smart, mobile-based banking on a massive scale. Regulators are now adapting to new customer demands.
The Asia-Pacific retail banking market is diverse, reflecting the different levels of social, economic and financial institutional development. It ranges from the near universal coverage found in the more developed markets of Australia, New Zealand, Singapore and Hong Kong to the emerging market of Cambodia, where only 21% of people over the age of 15 have a bank account. It also includes India, where government policies have pushed inclusion by shifting state transfers, pensions and benefits directly into accounts or onto biometric smartcards. Accordingly, Indian account ownership has jumped from 35% in 2011 to 80% today.
However, bankers in The Economist Intelligence Unit’s survey see common themes. Within the Asia-Pacific region, changing customer demand will have the biggest impact on retail banking in the next three years.
Regulatory trends are less of a concern in Asia-Pacific (40%), compared to Europe (46%) and North America (56%). Bankers in Hong Kong and Singapore seem to benefit from the more tech-friendly “try it and see” approach of their own regulators. Both the Hong Kong Monetary Authority (HKMA) and the Monetary Authority of Singapore (MAS) have opted to create “regulatory sandboxes” to encourage innovation. These sandboxes allow banks and fintechs to trial their ideas while involving only a limited number of participating customers. However, the situation is very different in Australia, where bankers have come under fire from the regulator due to poor risk management, high fees and widespread mis-selling.
An April 2018 report by the Australian Prudential Regulation Authority into the Commonwealth Bank of Australia (CBA) made clear that “a widespread sense of complacency has run through CBA, from the top down”. The subsequent loss of 20m customer account details only compounded the likelihood of significant reputational damage.
Whose Customer are you? The Reality of Digital Banking
This report, the fifth in The Economist Intelligence Unit’s series on the future of retail banking, marks a significant shift in the strategic concerns of banking executives worldwide. Previous reports tracked the shift in customer expectations and its likely impact on distribution and product design. Now the focus is firmly on implementing open banking and dealing with its consequences.
Technology and digital are now bigger—and more important—trends than regulation. Changing client demand, the rise of the smartphone and the introduction of new digital technologies have replaced post-financial crisis regulation as the drivers of strategic thinking at banks around the world. Integrating open banking that allows apps to initiate payments and other financial transactions is core to adapting to the digital banking age.
No single digital strategy suits every bank in every market. Respondents say their banks are adopting different strategies. While 61% want to develop niche propositions, others are, to varying degrees, opening up and giving access to new third parties. Some banks will view regulatory and technological change as opportunities to recreate themselves and build new ecosystems, while others may simply comply with emerging norms and regulations by granting access to customer data and payments via competitors’ smartphone apps. Going with the easiest options may leave banks, and their products, at risk of being assimilated, aggregated and unbundled by agile competitors, leading to a loss of brand and product visibility.
Banks must become more agile. The development of agile products requires improved organisational agility as well. According to 52% of survey respondents, product agility is now their top strategic priority. New payment players and the likes of Google, Apple, Facebook and Amazon, collectively known as GAFA, know what their clients want and are able to adapt quickly. Banks have to keep up, restructuring their business models to ensure that new products and features can be integrated quickly across physical and digital channels.
The impact of open banking and tighter security and data rules—and the conflicts between them—do not appear to be fully understood. While 71% of respondents are focusing their digital investment on cyber security, only 17% are concerned about a third-party relationship vulnerability being exploited as a result of open banking. The biggest danger to a sustainable banking model is the loss of valuable data on customers’ lifestyles and needs. Without that insight, all banks will struggle to upsell more profitable loan, investment and retirement products.
Customer and regulator concerns about data security may limit some of the big banks’ ambitions. The larger banks can take the fintechs on by building all-encompassing platforms that offer a seamless interaction with other products, services and comparison tools. Offering greater functionality means banks can learn more about customer needs and tailor new products to match.
Artificial intelligence and chatbots have a role in customer services, authentication and fraud, but banks are taking a cautious line as they do not want to lose their customers’ trust. Just over 20% of respondents think artificial intelligence (AI) will improve the user experience. However, banks need to appease customers’ uncertainty about the security of their personal information and how these data about them may be used. They will need to do this while maintaining a frictionless user experience that still takes into account individuals’ needs.
The shifting landscape of global wealth: Future-proofing prosperity in a ti...
In some instances the impact of this shift will be shaped by local factors, such as demographic changes. In other instances this shift will reflect shared characteristics, as demonstrated by the greater popularity of overseas investing among younger high-net-worth individuals (HNWIs) brought up in an era of globalisation. Whatever the drivers, the landscape of wealth is changing—from local to global, and from one focused on returns to one founded on personal values.
Despite rising economic concerns and a tradition of investor home bias in large parts of the world, the new landscape of wealth appears less interested in borders. According to a survey commissioned by RBC Wealth Management and conducted by The Economist Intelligence Unit (EIU), younger HNWIs are substantially more enthusiastic about foreign investing. The U.S. is a particularly high-profile example of a country where a long-standing preference for investments in local markets appears set to be transformed.
Click the thumbnail below to download the global executive summary.
Read additional articles from The EIU with detail on the shifting landscape of global wealth in Asia, Canada, the U.S. and UK on RBC's website.
In the first half of 2018, two major data-related EU regulations—the Markets in Financial Instruments Directive II (MiFID II), which went into effect in January, and the General Data Protection Regulation (GDPR), which will be implemented on May 25th—are changing how financial services firms manage data. Although legislated in the EU, these two regulations apply to organizations that conduct business in Europe, requiring global firms to come up to speed on compliance.
Meanwhile, other countries face their own regulatory changes and proposals, such as:
16977
Related content
Financial Services
The shifting landscape of global wealth: Future-proofing prosperity in a ti...
In some instances the impact of this shift will be shaped by local factors, such as demographic changes. In other instances this shift will reflect shared characteristics, as demonstrated by the greater popularity of overseas investing among younger high-net-worth individuals (HNWIs) brought up in an era of globalisation. Whatever the drivers, the landscape of wealth is changing—from local to global, and from one focused on returns to one founded on personal values.
Despite rising economic concerns and a tradition of investor home bias in large parts of the world, the new landscape of wealth appears less interested in borders. According to a survey commissioned by RBC Wealth Management and conducted by The Economist Intelligence Unit (EIU), younger HNWIs are substantially more enthusiastic about foreign investing. The U.S. is a particularly high-profile example of a country where a long-standing preference for investments in local markets appears set to be transformed.
Click the thumbnail below to download the global executive summary.
Read additional articles from The EIU with detail on the shifting landscape of global wealth in Asia, Canada, the U.S. and UK on RBC's website.
To better understand the opportunities and challenges in developing a fintech business in seven ASEAN markets, The Economist Intelligence Unit conducted wide-ranging desk research supplemented by seven in-depth interviews with executives in Australia and ASEAN.
Download report and watch video interview to learn more.
June 8 marks World Oceans Day. Learn more about the risks and solutions in this piece by Martin Koehring, Managing Editor and Global Healthcare Lead at The Economist Intelligence Unit’s thought leadership division.
Related content
Sustainability
Resetting the agenda: How ESG is shaping our future
The Covid-19 pandemic has exposed a wealth of interconnections – between ecological and human wellbeing, between economic and environmental fragility, between social inequality and health outcomes, and more. The consequences of these connections are now filtering through, reshaping our society and economy.
In this setting, the need to integrate environmental, social and governance (ESG) factors when investing has become even more critical. Institutional investors must employ ESG not just to mitigate risks and identify opportunities, but to engage with companies to bring about the positive change needed to drive a sustainable economic recovery in the post-Covid world.
In order to understand how ESG could be both a new performance marker and a growth driver in this environment, as well as how institutional investors are using ESG to make investment decisions and to assess their own performance, The Economist Intelligence Unit (EIU), sponsored by UBS, surveyed 450 institutional investors working in asset and wealth management firms, corporate pension funds, endowment funds, family offices, government agencies, hedge funds, insurance companies, pension funds, sovereign wealth funds and reinsurers in North America, Europe and Asia-Pacific.
Download the report and infographic to learn more.
Charting the course for ocean sustainability in the Indian Ocean Rim
Charting the course for ocean sustainability in the Indian Ocean Rim is an Economist Intelligence Unit report, sponsored by Environment Agency Abu Dhabi and the Department of Economic Development Abu Dhabi, which highlights key ocean challenges facing the Indian Ocean Rim countries and showcases initiatives undertaken by governments and the private sector in the region to address these challenges.
The urgency for change in Asia's food system comes largely from the fact that Asian populations are growing, urbanising and changing food tastes too quickly for many of the regions’ food systems to cope with. Asian cities are dense and are expected to expand by 578m people by 2030. China, Indonesia and India will account for three quarters of these new urban dwellers.
To study what are the biggest challenges for change, The Economist Intelligence Unit (EIU) surveyed 400 business leaders in Asia’s food industry. According to the respondents, 90% are concerned about their local food system’s ability to meet food security needs, but only 32% feel their organisations have the ability to determine the success of their food systems. Within this gap is a shifting balance of responsibility between the public and private sectors, a tension that needs to and can be strategically addressed.
This report, the fifth in The Economist Intelligence Unit’s series on the future of retail banking, marks a significant shift in the strategic concerns of banking executives worldwide. Previous reports tracked the shift in customer expectations and its likely impact on distribution and product design. Now the focus is firmly on implementing open banking and dealing with its consequences.
Related content
16958
Financial Services
Whose customer are you? The Reality of Digital Banking in Latin America
Banking with a social cause
Latin American banks and fintechs are racing to lower costs and access for the unbanked millions.
Just over half of all Latin American adults now have bank accounts. But credit and debit card ownership and usage lag that in the US and Europe. This has a subsequent effect on e-commerce purchases: 41% of internet shoppers paid cash on delivery last year.
However, an increasingly confident fintech sector that puts simplicity, low cost and social inclusion at the top of the agenda means that digitisation is a tool for improving access and equality in Latin America. Banks have responded by accelerating their digitalisation strategies.
Much of this regional change is being driven by changing customer behaviour and demands—often at a phenomenal pace.
But with over 200m potential new customers also at stake, Latin American banks see a bigger impact coming from new entrants than their peers see in the rest of the world (48% v 36% globally).
However, for the established banks, new payment players are the biggest threat, according to 51% of respondents. This is followed by neo-banks (23%), which offer bank-like transaction services without a full service current account.
Mobile money operators have also taken root in Latin America, with the number of registered accounts growing by 35% in the year to December 2016. Yet, just 10m mobile money accounts were active at the end of that year, leaving many consumers still without the means to make online, mobile or point-of-sale payments electronically. Accordingly, just 21% of Latin American bankers think that non financial firms, such as telecommunications or retailers, could become the biggest competition threat by 2020.
Whose customer are you? The reality of digital banking in Asia-Pacific
China leads Asia’s diverse digital banking markets
If you want to see what universal digital banking looks like, skip Silicon Valley or London’s fintech hubs. China’s Alipay and WeChat Pay show how to do smart, mobile-based banking on a massive scale. Regulators are now adapting to new customer demands.
The Asia-Pacific retail banking market is diverse, reflecting the different levels of social, economic and financial institutional development. It ranges from the near universal coverage found in the more developed markets of Australia, New Zealand, Singapore and Hong Kong to the emerging market of Cambodia, where only 21% of people over the age of 15 have a bank account. It also includes India, where government policies have pushed inclusion by shifting state transfers, pensions and benefits directly into accounts or onto biometric smartcards. Accordingly, Indian account ownership has jumped from 35% in 2011 to 80% today.
However, bankers in The Economist Intelligence Unit’s survey see common themes. Within the Asia-Pacific region, changing customer demand will have the biggest impact on retail banking in the next three years.
Regulatory trends are less of a concern in Asia-Pacific (40%), compared to Europe (46%) and North America (56%). Bankers in Hong Kong and Singapore seem to benefit from the more tech-friendly “try it and see” approach of their own regulators. Both the Hong Kong Monetary Authority (HKMA) and the Monetary Authority of Singapore (MAS) have opted to create “regulatory sandboxes” to encourage innovation. These sandboxes allow banks and fintechs to trial their ideas while involving only a limited number of participating customers. However, the situation is very different in Australia, where bankers have come under fire from the regulator due to poor risk management, high fees and widespread mis-selling.
An April 2018 report by the Australian Prudential Regulation Authority into the Commonwealth Bank of Australia (CBA) made clear that “a widespread sense of complacency has run through CBA, from the top down”. The subsequent loss of 20m customer account details only compounded the likelihood of significant reputational damage.
The shifting landscape of global wealth: Future-proofing prosperity in a ti...
In some instances the impact of this shift will be shaped by local factors, such as demographic changes. In other instances this shift will reflect shared characteristics, as demonstrated by the greater popularity of overseas investing among younger high-net-worth individuals (HNWIs) brought up in an era of globalisation. Whatever the drivers, the landscape of wealth is changing—from local to global, and from one focused on returns to one founded on personal values.
Despite rising economic concerns and a tradition of investor home bias in large parts of the world, the new landscape of wealth appears less interested in borders. According to a survey commissioned by RBC Wealth Management and conducted by The Economist Intelligence Unit (EIU), younger HNWIs are substantially more enthusiastic about foreign investing. The U.S. is a particularly high-profile example of a country where a long-standing preference for investments in local markets appears set to be transformed.
Click the thumbnail below to download the global executive summary.
Read additional articles from The EIU with detail on the shifting landscape of global wealth in Asia, Canada, the U.S. and UK on RBC's website.
Enjoy in-depth insights and expert analysis - subscribe to our Perspectives newsletter, delivered every week
Newsletter Signup
The Economist Group is a global organisation and operates a strict privacy policy around the world. Please see our privacy policy here
Join our Opinion Leaders Panel
Complete the form to join our panel and receive rewards every time you complete our business surveys. You will also receive the weekly newsletter, containing the latest cutting edge reports, blogs and industry data.
The Economist Intelligence Unit is part of the Economist Group. The Economist Group is a global organisation and operates a strict privacy policy around the world. To read more about us and our privacy policy please go to http://www.economistgroup.com/privacy
