Financial services in an era of discontinuities

The world in 2030

The world in 2030 is expected to look quite a bit different than how it does today. For example, ample attention and funding is being funneled toward bioconvergence solutions that are expected to increase life expectancy. As a result, there will likely be a subsequent impact on housing design and demand, as well as long-term investment planning solutions like public pension and social security schemes.

Additionally, the rising popularity of the metaverse has industry specialists predicting identity protection, verification, and validation to be an essential piece of a digital puzzle. For good reason: A recent report from Deutsche Bank estimates that e-commerce value in the metaverse could reach US$2 trillion by 2030. On a related note, DDOS attacks, data leaks, and website takeovers are on the rise, particularly among hacktivist groups involved in the Russia-Ukraine conflict. Financial firms in different countries that Russia considers to be hostile have been called out by name on various forums, effectively making them ripe targets for cyberattacks. 

A new space-monitoring tool from LeoLabs will enable insurance companies to track potential risks more accurately when considering a spacecraft’s likelihood of colliding with either another spacecraft or space debris. It’s also worth noting that the space and satellite insurance market have seen more than US$500 million in premiums over the past 10 years, and there is rising concern around underwriting low-Earth orbit (LEO) satellites. 

Finally, Goldman Sachs has announced an estimated average of US$1.9 trillion will need to be invested annually into decarbonization efforts by 2050 if we intend to limit global warming to 1.5˚C. However, a recent BlackRock report reveals that between public and private sources, the current funding only covers one-sixth of the total amount needed.

These innovations represent the tip of the iceberg for the future of financial services. Firms contemplating the world in 2030 can consider looking at it from five angles.

Potential five worlds impacting financial services
Clearly disruptive technological and scientific innovations are ushering in new breakthroughs in how firms can succeed in the future and how society can confront these and other challenges to come. This progress has the potential to enable the development of five “worlds” that could transform society as it exists today. While each may seem futuristic, there may be elements of each of these worlds that didn’t exist a few years ago.

• Inner World: Technology conjoining with life and interacting with the human body
• Mirror World: Technology creating an increasingly perfect and connected replica of Earth
• Off World: Technology expanding beyond Earth
• War World: Technology enabling new fighting capabilities
• Habitable World: Technology developed to help protect and heal the planet

Each of these will undoubtably involve both opportunities and risks, so leaders have choices to make: What can help enable best-case scenarios, and what is the likelihood of adverse outcomes if action isn’t taken?

Choices for leaders
Overall, an analysis of emerging trends and ongoing issues offer us three key takeaways to better prepare for the world in 2030. First, when considering data privacy and cyberattacks, those who control data will likely have the power. Regardless of subject matter, building a positive future depends on personal data being handled safely and securely. 

Second, there is plenty of potential for overlap between new products and innovations that incentivize positive future outcomes, and ones that create profitable opportunities for financial services companies. Some areas of focus, such as sustainability, will likely require large investments of capital from the industry in the realm of US$2 trillion through 2030.

Finally, the future of the industry will require a collaboration effort involving the government, technology, and the financial services sector if we want to utilize the emergence of new networks, platforms, and ways of working to drive positive change.

If handled well, each of these can contribute to an environment of greater trust. And while recent research shows that consumers want business to be more involved in societal issues, financial services as an industry shows, at best, mixed results when it comes to a list of most trusted industries.

When planning for how things will look across the world in 2030, leaders need to be willing to confront the most probable outcomes, including the likelihood changes could potentially have a more pervasive impact than currently fathomable. We can utilize the past as a sort of prologue to better understand how the financial services industry can play an important role in helping these major developments benefit everybody, while also identifying new opportunities for revenue and profit. 

Read the latest report to learn more, including how leaders who choose to approach these impending changes could have a very long-lasting impact on a business’s competitive advantage.