Spire Research and Consulting is the leading research consultancy in global emerging markets.
Industry
Financial Services
Financial Services Industry OutlookThe fall of Lehman brothers and Merrill Lynch confirmed that the US and European financial services sector was in deep crisis. The sector is now undergoing major restructuring, particularly in the US and the UK, as the respective governments attempt the most profound re-engineering of financial services since the Great Depression and the Bretton-Woods agreement of the 1940s.
The financial sector in Asia has been largely cushioned from these devastating blows. With a handful of exceptions, most Asian banks are adequately capitalized and have not sustained losses from sub-prime mortgage-related instruments at anywhere near the scale of some of their US and EU counter-parts. However Asian governments with privately-run financial sectors are nevertheless struggling to stimulate lending from banks which have been gripped by panic. In countries with state control over most of the financial sector, such as China and Vietnam, governments have been working with state banks to boost the supply of lending. Countries like South Korea and China are introducing new laws on asset appraisal, making it easier for foreign firms to value and bid for local companies.
As investment banking remains mired in crisis, traditional banking is rising to the spotlight. Emerging Asia is still under-banked and traditional activities such as consumer and (to a lesser extent) private and SME banking still hold good short-to-medium-term potential, depending on the country. Other than Chinese and Indian banks which saw increased deposits during the economic crisis, Islamic banking is also gaining ground, particularly among the ASEAN countries and in many parts of Europe.
Industry watchers are also keeping in view a long-term prize that is coming about as a result of demographic and economic changes – millions of middle class Asians who are approaching retirement and who will be able to seek higher returns on their savings than what is on offer from the two main asset classes of cash and property.
With the advances in technology, financial institutions are also taking the opportunity to capture more consumers through mobile financing. This allows banks to extend services to rural regions where residents were previously excluded from the urban financial system. Over 500 million customers are expected to be using mobile financial services by 2013.
In today's highly-competitive environment, financial institutions need to weigh the threats and opportunities that arise from the current downturn as well as shifting investment and savings patterns.
Spire’s financial services expertise
Financial service providers need to compete in the segments and niches that afford real growth in a difficult climate. Opportunities still abound in under-banked emerging markets, as well as in immature segments in more industrialized countries. Spire is poised to leverage our Asia-wide financial services experience to deliver research and consulting solutions that address these needs.
Our work in the financial services space has addressed products ranging from credit cards and unsecured consumer credit to SME banking, non-performing loans and debt securities.
