bearingpoint institute report - issue 003
DESCRIPTION
Innovation is a strong theme in this third edition of the BearingPoint Institute Report. As the economic turmoil starts to ease, opportunities are emerging for businesses and organisations to take the lead by embracing change and adapting before the competition. In some sectors change is mandated by regulators; in others evolving consumer behaviours are forcing a rethink. Common to most opportunities is the need to drive innovation, evolve business models and engage more closely with customers and clients.TRANSCRIPT
BearingPoint Institute ReportIssue 003 - Extract
StrategiesMoving hospitals from curing to caringInnovation without frontiers
OpinionsMeasuring innovationSituational awareness in ChicagoWhy China now?
InterviewCrédit Agricole’s community-based mobile strategy
POST-FINANCIAL CRISIS BANKING
ARE INSURERS THE NEW BANKS?
CROSS-CHANNEL COMMERCE
Trends
Banks are falling out of favour with the marketsSince the financial crisis, the price-to-book value of banks has dropped significantly relative to other sectors
The industry is facing unprecedented pressures, a possible signof structural changes to come
Source: Thomson Reuters Datastream
0
1
2
3
4
5
61996 1998 2000 2002 2004 2006 2008 2010 2012
Capital dilution
2009
667
2012
58,413
2010
12,959
2011
48,335
Tier-1 capital andtotal assets, €billion
Capital injections
2007200820092010 2011 2012
€850bn
TIER-1 CAPITALOnly €495bn added since 2007
TOTAL ASSETSDecline of growth
€350bn
Fresh capital needed in light of Basel III requirements
Capital fed to European banks since 2007
Private and Governmental capital injections aren’t working. Less than half of the money injected has
gone into capital reserves and, 5 years on, more is still needed to meet new Basel III requirements
Job cutsAcross major European banks
€7bn lawsuitsAgainst major European
banks since 2009
MSCIU.S.
MSCIEurope
MSCIU.S. banks
MSCIEU banks
1,000
1,600
1,200
1,400
30,000
34,000
32,000
With more lay-offsto come as the industry restructures, many will
leave the shrinking sector for good as redundancies
outpace new hires by roughly two-to-one
€3.65bnEmbargo
€2.62bnLibor
€380mMisselling
€391mOther
Bridging the infrastructure finance gap?Before the financial crash banks were prepared to finance long-term infrastructure projects. However, due to
restrictive regulations, it is now more di�cult for them to provide loans with long maturities
European project finance volumes are lower than 2005 levelsVolume by source, 2005–2012 in $billions
Governments and banks will not plug the gapBearingPoint European investors survey
86%
86%of all respondents agree that banks
now o�er significantly less long-term project financing
79%say governments will fund fewer
infrastructure projects
83%of bank and asset managers think that
regulations such as Basel III will constrain banks' infrastructure lending
2005IFI*SupportGrants
Loans
Debt:
Bonds
Equity
20122009200820072006 20112010
56
80
127
110
59
93
82
49
-61%
Construction phase(3-4 years)
Operational phase(20-40 years)
Bank loan
Maturities afterfinancial crisis
Maturitiesbeforefinancialcrisis
Bank loan
Risk level
Banksare shortening their loan maturities as
they are increasingly constrained by
Basel III
[ 53% agree33% strongly agree ]
[ 61% agree18% strongly agree ]
[ 61% disagree22% strongly disagree ]
BearingPoint-Infrstructure Journal survey, 2013. Survey data; 55 respondents, of which 26 Banks and Asset Managers, 11 Insurers, 10 Pension Funds, 8 Other funds
Source: Infrastructure Journal database extract for BearingPoint (2013)*IFI: International Financial Institution (e.g. European Investment Bank, Kreditanstalt für Wiederaufbau, European Bank for Reconstruction and Development)
Not to scale and for an illustrative purposeSource: BearingPoint
11
19
18
14
77118
34
6167
41
8695
5745
9
8
7
12
1070
5442
23
1
11
Source: IIHD Research, Euromonitor, Statista, ECB, IMF
Source: IIHD Research, Forrester Research Inc.Source: IIHD Research, Euromonitor
Britain keeps on spending ...The German retail market is the largest by volume. The UK, however, is the largest both as a
proportion of GDP as well as in absolute e-commerce Figures
... Germans stay frugal ...In 2012 selling space productivity in
Germany was more than 20% lower than in other European countries
... while France is yet to ‘click’France exhibits the lowest share of online buyers (63%), whereas the projected growth of online buyers is by far
the highest (21%)
3,219 4,043
4,198 3,963
GERMANYGERMANY
UK
FRANCE
Online buyers as apercentage of population
Growth ofonline buyers
NORDICS
17.4%
13.3%
20.6%
13.9%
69%
75%
63%
72%
UK
FRANCE NORDICS
Retailing salesEUR/m2 selling
space, 2012
€382bn
GERMANY
€2,644bn(GDP)
UK
€1,907bn(GDP)
€391bnStore-based retailing sales
€14bnNon-store based
retailing sales
€21bnInternet
retailing sales
€6bn €20bn €117bn €2bn €8bn
€349bn €8bn €38bn
€2,038bn(GDP)
€1,047bn(GDP)
BearingPoint Institute Report Issue 003
Willkommen, bienvenue, welcome! Innovation is a strong theme in this third edition of the BearingPoint Institute Report. As the economic turmoil starts to ease, opportunities are emerging for businesses
and organisations to take the lead by embracing change and adapting before the competition. In some sectors change is mandated by regulators; in others evolving consumer behaviours are forcing a rethink. Common to most opportunities is the need to drive innovation, evolve business models and engage more closely with customers and clients.
European banks face the dual challenges of a tightening regulatory framework and mounting commercial pressures. Our analysis shows that cost efficiency savings and risk-adverse policies only go so far in this post-financial crisis environment: agility together with innovation is the key to future growth. For instance, we learn in an interview with Crédit Agricole how the bank took the radical step of opening its customer data and enabled a community of developers to co-create mobile banking applications with, and for the benefit of, their customers.
For insurance firms, a golden opportunity is knocking at their doors: the European Commission estimates that EUR 2 trillion of infrastructure investment is required to meet its Europe 2020 growth agenda. Our study shows that insurers are keen to bridge this financing gap, thus diversifying the ecosystem of infrastructure investors currently dominated by banks and industrial investors.
Meanwhile dramatic changes to consumer behaviours, coupled with weakened spending power,
are driving bricks-and-mortar retailers into a ‘race to the bottom’, disadvantaging them in the battle against online shops. We look at how an integrated cross-channel commerce strategy can be the basis for innovation and differentiation.
Flick though for more on how innovation is taking place across industries, from how hospitals can move ‘from curing to caring’ to the city of Chicago deploying situational awareness, read why Western companies can learn about ‘inclusive innovation’ from developing countries or should consider ‘why China now?’
The BearingPoint Institute is also innovating: this Issue 003 features more themes, a more concise and graphical presentation, and summaries in French and German. There are also video interviews with the authors, directly accessible on the device of your choice and from any format – print with augmented reality (see the Layar instructions below), iPad, Android, eBook or web.
We hope you enjoy the issue. Please do drop us an email at [email protected] to tell us what you think.
EditorialPeter Mockler Managing Partner – BearingPoint
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BearingPoint Institute Report Issue 003
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BearingPoint Institute Report Issue 003
TRENDSFive steps for European 4 banks to shape upEurope’s post-financial crisis regulatory regime is evolving fast: our study shows banks have to respond with proactive innovation, not squeezing margins
Are insurers the new 30 banks for infrastructure investments?We analyse the opportunities and options for insurers to ramp up their large-scale infrastructure project investments, as banks and governments scale back theirs
Can cross-channel offer 60 Europe’s retailers a more certain future?Our survey shows cross-channel commerce is a priority for retailers, yet adoption is slow; we detail the strategy options available to them to avoid the ‘race to the bottom’
STRATEGIESHospitals: from curing 78 to caringInfluencing the behaviours of patients can greatly improve the quality of healthcare delivery according to our survey and case studies
Innovation without 102 frontiersWestern businesses can learn lessons from emerging economies to break out of existing thinking and unlock innovation
OPINIONSCan innovation be 56 captured, bottled and measured? What are the underlying features of innovation, and how can they be harnessed?
Situational awareness 94 and the City of ChicagoSituational awareness can help organisations use the information at their disposal to improve how they engage with customers and deliver services; the City of Chicago shows us how
Catching the second 118 wave of growth in the Middle KingdomA BearingPoint China perspective on the country’s changing role in the global economy and the new opportunities this brings for Western businesses
INTERVIEWCrédit Agricole: 22 accelerating into the digital era with co-creationMichel Goutourbe, deputy GM at the mutual bank, details their award-winning app store builds on open data and co-creation
HIGHLIGHTS 122What personality is your company?
Daring to take a ‘bottom of the pyramid’ approach
ICT and health systems in Africa
Contents3
About BearingPointBearingPoint consultants understand that the world of business changes constantly and that the resulting complexities demand intelligent and adaptive solutions. Our clients, whether in commercial or financial industries or in government, experience real results when they work with us. We combine industry, operational and technology skills with relevant proprietary and other assets in order to tailor solutions for each client’s individual challenges. This adaptive approach is at the heart of our culture and has led to long-standing relationships with many of the world’s leading companies and organisations. Our 3350 people, together with our global consulting network serve clients in more than 70 countries and engage with them for measurable results and long-lasting success.
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About the BearingPoint Institute At the BearingPoint Institute, our ambition goes beyond traditional ‘thought leadership’. We aim to contribute original ideas to the science of business management while equipping decision-makers with practical advice gained in the field and through our research projects.
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LEADERSHIP TEAM
Per Jacobsson, BearingPoint Mike Kronfellner, BearingPoint Ludovic Leforestier, BearingPoint
ADVISORY BOARD
Denis DelmasPresident of TNS Sofres, Vice-President Europe and Board member of TNS Group
Dr Jonathan Freeman Managing Director, i2 media research ltd. & Senior Lecturer, Goldsmiths, University of London
Prof Dr Fons TrompenaarsFounder and owner, THT Consulting
Dr Victor VroomProfessor of Management and Professor of Psychology, Yale School Management
EDITORIAL TEAM
Ludovic Leforestier, BearingPoint Jean-Michel Huet, BearingPoint Jonathan Stephens, BearingPoint
PRODUCTION
Michael Agar, Michael Agar DesignJon Collins, Inter OrbisTanja Dietenberger, BearingPoint Chris Norris, CopyGhostingAndrew Rogerson, GristAngelique Tourneux, BearingPoint
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ISBN: 978-0-9576165-2-3 (Print edition) ISBN: 978-0-9576165-3-0 (Digital editions)
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