As the European financial services industry continues changing, companies are combining banking, insurance and securities activities.
Even companies that once regarded themselves as 'banks' or 'insurers' have operations in an increasing number of businesses.The Future of Financial Conglomerates in the Era of the Internet, a new management report by Reuters Business Insight, explores the logic for the creation of financial conglomerates and highlights key issues in managing a wide array of connected businesses.
It proceeds then to analyse where financial groups can create and add value to the financial services industry.
The report explains how the traditional business models fail to capture the extent of change brought about by technological developments and draws the pertinent implications on the players already operating in the market.
It also reveals the new rules of the game, and illustrates the most appropriate solutions to meet the new challenges.
The Future of Financial Conglomerates in the Era of the Internet explains the causes of change and provides a forward-looking analysis of the optimal responses to a new environment for complex organisations.
The report seeks to answer the questions about business definition and scope, core competencies, management focus and strategic responses.The logic behind the formation of complex groups:- The rationale behind the creation of complex financial organisations: Dregulation, the search for cross-selling and customer service.
The attraction to fast growing retail businesses and the repulsion to unattractive business lines is examined, as well as the difficulty in achieving cost savings and the importance of initial conditions in the firm's development.- Focusing management attention on value-creating activities: An analysis of the complexity faced by management, together with a thorough review of the value chain.
What activities can be outsourced? What is the payoff? Where should management's efforts be addressed? - Change - the whole financial services perspective is turned upside down: Analysis of key issues, including the rising tide of complexity, regulatory barriers, rising contestability and competition and the change brought about by technology.
How is the competitive equilibrium shifting? Where are the new areas where firms can add value? Strategic options available - what is needed to succeed? How do you focus on customers and how do you sell other people's products? Financial conglomerates will have to decide where to focus their operations across different lines of business.
Should they take the role of the product manufacturer?