[PICTURE: Anders Borg]
Anders Borg on the Uberization of the banking sector:
“WE CANNOT ACCEPT A PARALLEL FINANCIAL SYSTEM”
Anders Borg, the former Swedish finance minister and current chairman of the World Economic Forum's Global Financial System Initiative, has the world as his working field. He believes that the recovery in Europe will slowly continue,andthe hopesof the global economy are very much dependent on the development in the USA. Quite unexpectedlyhe also places a smallbet on China, where he expects continuous strong growth, as in other regions in Southeast Asia.
“The parts of the global economy that are most affected by digitalization show such strongdevelopment that it is not wrong to talk about a revolution. Here we witness tremendous growth in which financial companies will play a key role. The financial sector adopted IT in their services early on. This time the sector will continue to develop dynamically as a result of digitalization.”
Borgis not willing to completely dismiss the virtual currency Bitcoin, which is based on a decentralized registration of blockchains. But he stresses that we have not yet seen examples of virtual currencies replacing physical currencies.
He calls Bitcoin and other digital phenomenaan“Uberizationof the banking sector”. That is a metaphor referring to the digital taxi company Uber, which uses an IT platform to organize taxi services around the world, without owning its own fleet of vehicles. He wants to highlight the fact that through digitalization banks and the entire financial sector arefacing major changes that drive new business models.
But, there are as always also countervailing powers in place. A heavy burden of regulation has been imposed on the financial sector since the financial crisis in 2008.
“We want a stable financial system,” saysBorg. “It is important forall companies to play by the same rules. New digital businesses in asset management or financial services must not be allowed to bypass stricter rules. Thatencourages imbalances and distorts competition. We cannot accept a parallel financial system.”
So what will financial companies do best in this new digital world?
“There is only one answer,”Anders Borg responds quickly. “The future winners will be the ones who respond to change and work close to their customers. Working close to your clientmeans you cancharge more for the most important services you provide. If you do not know how to do it, copy the successful and be proud to do so.”
CAPTION
”The future winners will be the ones who respond to change and work close to their customers,” says Anders Borg. He spoke at OpusCapita Finance Morning in Sweden.
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Published in OpusCapita Journal 2/2016. Read the whole magazine here.[insert a link to the Issuu version of OpusCapita Journal 2/2016]
READ ALSO Thimon de Jong’s view of the effects of digitalization in business and private life[add a link to the theJournal article file “OCJ-2-2016-Thimon de Jong-web”] and Jonas Kjellberg’s answer to the question “Is it the big that beat the small, or is it the fast that beat the slow?” [add a link to the theJournal article file “OCJ-2-2016-Jonas Kjellberg-web”].