Global Overview of the Finance and Insurance Industry

October 2021

This briefing examines how the finance and insurance industry is performing globally, and in the largest countries in terms of finance and insurance output. The report also provides data for production, market size, imports, exports, industry costs, industry profitability and number of companies. The industry and market overview provide benchmarks against other countries in the region.

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Examining four trends shaping the finance and insurance industry

Digital transformation accelerates

Traditional banks will continue to focus on digitalisation and automation in order to transform their operating models, reduce operational costs, enhance the customer experience and improve risk management. Most financial institutions are planning to boost investment in IT infrastructure and digital banking solutions in the coming years.

Wealth management as a growth engine

Banks are anticipated to expand wealth management operations in order to diversify their revenue streams amid a persistent low interest rate environment. There is an increasing focus on wealth management opportunities in the US and Asia Pacific countries, thanks to a rapidly expanding wealthy and affluent consumer segment.

Rapidly emerging fintech

Fintech companies will continue to transform the industry. Increasing digital connectivity and changing consumer behaviour will drive fintech market growth in the coming years. Increasing venture capital investment will help expand fintechs’ international presence and services offerings. In addition, fintech companies will continue to improve access to financial services, targeting large unbanked populations in developing countries.

Consolidation of banks

M&A activity in the financial services industry is likely to gather pace in the future, amid intensifying competition and low profitability. Traditional banks will look for ways to build their digital capabilities, while fintech start-ups will seek to develop their capabilities further and expand into new markets.

Scope
Examining four trends shaping the finance and insurance industry
COVID-19: Impact on finance and insurance
Finance and insurance industry proved resilient during the COVID-19 pandemic
Industry to experience strong turnover growth over the medium term
US remains the largest industry globally, while China strengthens its position
Low interest rates, rising operating costs and growing competition hinder profit growth
Strong B2B demand and rising household spending on financial services drive market growth
JP Morgan Chase & Co maintains the leading position among global financial institutions
Total number of companies continues to increase in most countries
The COVID-19 pandemic and intensifying competition will boost industry consolidation
North America and Asia Pacific to drive industry growth in the future
Latin America to witness prolonged recovery from COVID-19 shock
Key future trends shaping the global industry
US: I ndustry maintains stable growth over 2020
Financial institutions play a major role in US economic recovery
China: Industry witnesses a slowdown in 2020 due to the COVID-19 pandemic
Fintech companies are set to boost financial inclusion in the country
Japan: Industry suffers from the COVID-19 pandemic
Tokyo’s increasing attractiveness as regional financial hub
Germany: Financial sector remains resilient to COVID-19 shock
Banking sector on a path for reorganisation
UK: I ndustry faces sluggish growth in 2020 due to a drop in consumer credit
UK’s financial sector faces two-sided pressures
France: COVID-19 has a moderate impact on the French finance and insurance industry
France has strong potential to become the main EU financial hub
Australia: Industry se es consumer and corporate lending slowdown in 2020
Accommodative monetary policy and digitalisation efforts to support industry growth
India: Industry revenue shrinks significantly, driven by the COVID-19 shock
Rapidly emerging fintech market and liberalisation efforts to boost industry growth
Canada: Industry growth negatively affected by the COVID-19 pandemic
Major Canadian banks will continue to focus on digital transformation
Italy: COVID-19 shock weakens consumer lending, but corporate lending increases
Italian financial services sector seeing consolidation
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