1. Emerging Economies See Accelerated Growth in Mortgage Lending -- Growing economies are seeing a large segment of their population enter the labor force. With an increased demand for housing, as well as continued stability of interest rates, mortgage lending in these economies will expand at an accelerated rate. Their governments will also change their role from lender to enabler/promoter. Banks skilled at running international operations will have a strong opportunity to expand their geographic footprint.
2. Retailers at the Gates -- The number of retailers crossing over to Financial Services will grow, as they are better positioned to serve the emerging segments of the market. Their strong value proposition in terms of service and convenience, as well as their superior marketing skills, will become a differentiator in cross selling.
3. Se Habla Espanol -- The Hispanic market is the fastest-growing segment, economically speaking, in the United States. This true emerging segment will produce a net growth in the market, but strong language and cultural characteristics mandate a differentiated value proposition. There is also the potential for explosive growth in the short term if immigration issues are resolved and more workers join the formal economy.
4. True Globalization of Global Banks, but Will Life Insurers Enter the Global League- -- A need to improve their profitability will force international banks to look for ways to capture economies of scale. The diversity of products, systems and operations from acquisitions has resulted in low operating efficiencies; therefore the pressure to standardize and leverage regional and global capabilities and volumes will increase. The rationalization of solutions and infrastructure will go from being good business, to being a key to survival. Life insurers too have a remarkable opportunity to grow, as a large retirement ble. The diversity of products, systems and operations from as, to being a key to survival. Life insurers too have a remarkable opportunity to grow, as a large retirement ble. The diversity of products, systems and operations from acquisitions has resulted in low operating efficiencies; therefore the pressure to standardize and leverage regional and global capabilities and volumes will increase. The rationalization of solutions and infrastructure will go from being good business, to being a key to survival. Life insurers too have a remarkable opportunity to grow, as a large retirement bubble exists in virtually every developed and emerging economy. Larger European insurers have been most aggressive in establishing operations in more countries, while the larger North American insurers have been more cautious and selective in new market entry. Demographics, tax incentives, deregulation, technology, market convergence and wealth creation are combining to create the global market opportunity of a lifetime, but life insurers are currently sorting out their roles. Life insurers with ambitions to take on 'global' status will take decisive steps on reinventing their operations this year.
5. Emergence of Individual Consumer Healthcare Investment Accounts -- Beyond revolutionizing healthcare benefits, defined-contribution plans will create 50 to 100 million new individual investment accounts, creating a $1 trillion annual money flow. More than 150 major financial institutions have entered the business already, but institutions that can incorporate consumer-directed healthcare products and partner with healthcare plans that attract large groups of customers will be the ones who gain significant growth at reduced acquisition costs.
6. Security and Privacy Move From Hype to Action -- The growth of online shopping will continue to drive the increased perception of exposure, mainly among the most attractive segments of the market. The pressure to comply with Operational Risk regulations and guidelines will also continue to increase.
7. Good Looking Annuity Moves the Needle -- Leading insurers are finding that appealing annuity product features, designs and packages are increasingly moving the needle more than other performance drivers. Increasing attention will be placed on product development and the supporting systems that enable rapid product configuration and placement in the market. This trend will be made even more critical because of guaranteed income products, which require sophisticated hedging and stochastic modeling methods. More advanced packaging will emerge, because many of the "at retirement" market want an integrated solution that pulls together elements of annuities, investment, cash management, healthcare funding and more, all in one package. 8. Modernizing the Claims Process -- In recent years, property and casualty (P&C) companies have differentiated themselves with data- rich, multivariable underwriting and point of sale productivity applications that attract agencies. These efforts will continue to measurably set the larger P&C insurers apart in profit ratios, new agency signings and growth. However, they will begin to increasingly dedicate their attention and resources to the claims process, which accounts for roughly three-quarters of premiums. As one of the most complex processes in financial services, a focus on system modernization that involves straight-through processing, mobile technology for data capture and communication, along with more advanced predictive modeling and fraud detection will make the claims process more efficient.
Some 25,000 EDS employees work on finance-related projects for about 200 customers in 30 countries for clients such as ABN Amro, Aon, Bank of Canada, Bank of Queensland, la Caixa, CIBC, Commonwealth Bank Group, KBC, Korea First Bank, Lloyds TSB, Royal Bank of Scotland, Societe Generale, Visa and Westpac.