The Globalization of Financial Services in the High Velocity Economy

I’m now in Grand Cayman, one of the top five financial centers in the world, where I’ll be speaking to the Cayman Business Outlook this morning.

I’ll be taking a look at the rapid rate of change in the global financial industry — which is really going from fast to furious, given the confluence of a number of factors:

• New business models in the financial services sector are emerging faster than ever before. There is an increasing volatility with global money. Witness the rush to private equity: those organizations who were able to quickly respond and come up with innovative new financial products were the ones who benefited most from the private equity boom.
• Unique challenges are emerging in the world of global finance from a skills perspective. As the financial services world becomes faster and more complex, the skill set of those involved in high end banking services is becoming ever more precious and scarce.
• The unique attitudes and perspectives of Gen-Connect will further challenge the industry. Those aged 25 and under now becoming actively engaged in the workforce, albeit in an entirely different way: in that they work really hard to not have to get a career. Instead, they focus on a multiple set of skills and careers over a short period of time.
• Offshoring is going strategic: It’s not just about saving money any more. Outsourcing activities will increase, because it will become one of the key ways to establish a competitive advantage: if you can get the right skills at the right time for the right purpose in a financial marketplace, you might survive the challenges of the future.
• Existing financial centers will be impacted by the rapid emergence of new competitors: Asia is afloat on buckets of cash. Continued political uncertainty means that volatility remains with oil, with the resulting massive excess oil wealth in the Middle East. Barron’s indicates that Asian and OPEC countries accumulated about $1 trillion in reserves in ’06. That’s a huge amount of surplus monies that will be put to active use, and we can expect to see both Dubai and Singapore taking on an aggressive role, working to establish themselves as the global financial powerhouses of 2010.

Suffice it to say, there’s a lot of high velocity out there: and the trick to thriving is riding these trends to success, by being open change, by innovating as a country, and by innovating as a financial community.