The financial markets industry is divided over the extent of fundamental
change
Extent of Fundamental Change
(Percentage of Survey Respondents1)
Moderate
amount of
change
7%
Significant
change
43%
No change /
not much
change
50%
n=54
Note: 1Question asked: To what extent do you believe there will be fundamental change in your business
Source: Face-to-face interviews; IBM Institute for Business Value analysis
1
© 2010 IBM Corporation
Greed, incentives and lack of accountability are perceived to be the largest
cause of inertia, while regulation and shifts in client behavior are expected
to drive change
Drivers of Inertia
(Percentage of Survey
Drivers of Change
Respondents1)
(Percentage of Survey Respondents2)
Increased regulation
Greed,
incentives, lack
of accountability
Client - lack of trust
Client - risk aversion
Client inertia,
e.g., not wanting
change
Client - new client targets, e.g., in
Asia
Client - price sensitivity
Client - going direct /
disintermediating
Client risk
appetite already
increasing
n=54
0%
20%
40%
60%
80%
n=54
Technology
100%
0%
5%
10%
15%
20%
25%
Note: 1Question asked: What are the largest drivers of inertia?; 2What are the largest drivers of change?
Source: Face-to-face interviews; IBM Institute for Business Value analysis
2
© 2010 IBM Corporation
Regardless of whether executives expect fundamental change, most
believe returns will shrink
Industry Returns
(Percentage of Survey Respondents1)
Decrease
significantly
13%
Increase
6%
Decrease a
small amount
50%
Stay the same
31%
n=54
Note: 1Question asked: What will industry returns look like in the future?
Source: Face-to-face interviews; IBM Institute for Business Value analysis
3
© 2010 IBM Corporation
The top three concerns are uncertainty about value propositions, keeping
up with data and regulation
What keeps you awake at night?
(Percentage of Survey Respondents1)
What is our value proposition?
Keeping
with
dataandvolumes
Keeping up up
w ith data
volumes
fragmentation
Regulation – how
to get
itit
Regulation
- howaround
to get around
Regulation
- no more black box
Regulation
– transparency
What is our value proposition? Where is this industry going?
Shift tow ard low er margin businesses, e.g., passive
Talent
Increased volatility / uncertainty
Ethics
Regulation - how to comply w hile assisting long term vision
Regulation - lack of regulatory skills
Client risk aversion
Politicians
Trust
Cost of legacy systems
Lack of client loyalty / sw itch easily
Risk management
Mapping to clients' w orkflow
n=54
Keeping patient alive w hile doing transplants
Retirement underfunding
Paralyzed by process
Lack of business alignment
Note: 1Question asked: What keeps you awake at night?
Source: Face-to-face interviews; IBM Institute for Business Value analysis
0%
4
2%
4%
6%
8%
10%
12%
14%
© 2010 IBM Corporation
The top three most cited strategic initiatives include exploiting data,
creating multi-asset class platforms and collapsing silos
Top Strategic Initiatives
(Percentage of Survey Respondents1)
Change operating model to exploit data
Create multi-asset class platforms
Collapse silos (e.g., w ealth mgmt / asset mgmt)
Analyze enterprise risk / rew ard trade offs
Rationalize / consolidate systems
Standardize products, e.g., fixed income
Improve client loyalty
Expand in Asia
Initiatives that improve
client focus
Improve client segmentation and profitability
Improve client onboarding process
Initiatives that streamline
the operating model
Improve infrastructure to handle data volumes / low latency
Improve business process management
Create shared services / outsource
n=54
Improve time to market
Improve talent pools through quality training
0%
Note: 1Question asked: What are your top three strategic initiatives over the next three years?
Source: Face-to-face interviews; IBM Institute for Business Value analysis
5
2%
4%
6%
8%
10%
12%
14%
16%
© 2010 IBM Corporation
Client initiatives are focused on exploiting data and creating multi-asset
class offerings while streamlining initiatives are focused on rationalizing
systems and analyzing risk / reward tradeoffs across the enterprise
Client Focus Initiatives
(Percentage of Survey
Respondents1)
Change operating model to exploit
data
Streamlining Operating Model Initiatives
(Percentage of Survey Respondents1)
Rationalize / consolidate systems
Create multi-asset class platforms
Analyze enterprise risk / reward
trade offs
Collapse silos (e.g., wealth mgmt
/ asset mgmt)
Improve client loyalty
Standardize products, e.g., fixed
income
Expand focus on clients in Asia
Improve infrastructure to handle data
volumes / low latency
Improve client segmentation and
profitability
Improve client onboarding process
Create shared services / outsource
Improve time to market
n=54
Create client-oriented talent pools
0% 5% 10% 15% 20% 25% 30%
Note: 1Question asked: What are your top three strategic initiatives over the next three years?
Source: Face-to-face interviews; IBM Institute for Business Value analysis
6
Improve business process
management
n=54
0%
5% 10% 15% 20% 25% 30%
© 2010 IBM Corporation