Financial services organisations are facing the most serious and prolonged crisis since the 1930s.
Contagious uncertainty, instability and resulting write-downs are infecting ever more sections of the market. Funding is drying up. Equity values are becoming ever more volatile. Demand for financial products and services is falling back amid an accelerating slowdown in the global economy and dip in business and consumer confidence.
Organisations will need to demonstrate thorough understanding and control of their risks to rebuild investor confidence, attract funding and stabilise their businesses in the short term. Going forward, many may need to transform their business models and associated performance objectives and incentives as part of a more sustainable long-term approach to value creation.
While demanding, the current market environment could open up valuable opportunities for growth. Strongly capitalized groups are in a favourable position to pursue ambitious acquisition and business development strategies. Firms that can effectively manage costs and enhance understanding of individual customers' evolving needs will be able to build enduring and profitable client relationships. Emerging markets and alternative investment sectors also continue to offer significant potential for expansion.