to 2020 vision

Like many businesses, we see 2020 as a year of great opportunities and challenges. Below is an outlook from our perspective as a business that delivers transformation and change to banks, insurers and investment firms across Asia and in the UK.

In our three main sectors, banking, insurance and investment we see the following opportunities and challenges:

 

 

INSURANCE

OPPORTUNITIES

China: Opening insurance market to foreign companies

Prospective shallow recessions may incentivise savers to switch to insurance

Planning for new round of bancassurance deals

Growing data integration enables new opportunities across businesses

 

CHALLENGES

Asia: Swing in new business away from Hong Kong & towards other countries

Shortage of resources with delivery experience for IFRS 17 implementation

Small insurers unable to cope with the cost and impact of IFRS 17

Actuarial models struggle with interpretation and complexity of IFRS 17

Insurers face organizational changes in IFRS 17 implementation

 

 

BANKING

OPPORTUNITIES

Crackdown on shadow banking in China brings business back to banks

More large assets purchased rather than leased in light of IFRS 16

South and East Asia: US-China trade war leads to increase in trade finance

Increasing investment in automation enables lower cost back-office

 

CHALLENGES

Planning and implementing IBOR cessation brings disruption/uncertainty

US-China trade war continues to limit trade finance demand in both countries

UK: Brexit implementation continues. Equivalence continuation uncertainty

UK: Regressive tax policies (IR35) reduce employment competitiveness.

Widening yield curve control by central banks possible

 

 

INVESTMENT

OPPORTUNITIES

Prospective shallow recessions may incentivise more active consumers

China: Even more IPOs through HKEX

South and East Asia: growth through manufacturing opportunities

More stable reporting environment  post-IFRS 9

 

CHALLENGES

IFRS 16 leads to balance sheet changes for firms with lease liabilities

China: Rate of new investment in manufacturing slows down

Growing number of high-yield bond defaults

China: Reduction in shadow banking unwinds mutual support structures

Debt-funded growth more challenging

 

In our main markets we foresee the following themes:

Singapore

• Market for talented people will accelerate. Fintech-startup mania may be over, however people with genuine technology skills will be most in demand.

• Growth in banking, insurance and investment will continue to make progress and even accelerate at the cost of other similar markets in Asia.

 

UK

• Brexit implementation continues. Equivalence continuation uncertainty. Focus on Brexit detracts on focus for growth.

• Regressive UK government tax policies reduce employment competitiveness (IR35). We have a solution that we’ve developed clients to overcome this challenge..

 

Hong Kong

• Challenging local sentiment will continue and be macro-political events beyond its influence.

• Progressive businesses will be able to expand market opportunities away from traditional locations and channels.

• A genuine shortage of talented people able to implement business change, so there will continue to be demand for talented outsiders.


What do you see happening in 2020?