FSIs Shift Focus to Growth

Organic growth is now a top priority for financial services companies that have spent recent years focusing on conserving and building resources while creating value for shareholders, according to a survey conducted in February and March 2005 by New York-based PricewaterhouseCoopers (PwC) and the Economist Intelligence Unit (London). Sixty-five percent of the financial services senior executives surveyed agree that growth is higher on the agenda this year than it was last year. Additionally, the survey reveals that 95 percent of executives in the Americas and Europe look to organic growth - as opposed to mergers and acquisitions, partnership arrangements, etc. - as the No. 1 strategy to achieve growth targets this year.

"Technology is a big enabler for growth, especially in the CRM [customer relationship management] and front-office space, to create new markets," said Nigel Vooght, partner, PwC, at a briefing on the survey. Twenty-three percent of survey respondents cited IT/technology as a critical enabler of growth over the next 12 months. IT/technology ranked fourth among enablers of growth, following sales, marketing and customer services capabilities (42 percent); human resources (36 percent); and brand, reputation and customer satisfaction (35 percent).

Technology also will play a big role in the insurance sector as a provider of sophisticated approaches to compliance and reporting as well as more systematic approaches to risk and capital allocation and employee relationship management (ERM), according to the study. These areas will support growth in health insurance as the aging population swells, the cost of care increases and the demand for non-life insurance grows in developing economies such as China's, the report continues, noting that the non-life market in China grew at an average rate of 16 percent over the past five years.

Executives from 201 institutions in Asia, Europe and North America participated in the survey.