Demographic transition changes the financial industry
Payment services from high-tech companies like Apple Pay, Google Pay or Amazon Cash threaten the traditional financial industry for quite a while now and the progress in cryptocurrencies come in addition. Also, the field of artificial intelligence has an increasing impact on the financial industry. Steadily, new and convenient products, aimed at the final customer, are released, which enable everyone, to conduct financial operations and investments through manageable software programs without having to rely on a traditional bank.
Not only banks but also insurance companies are affected. And additionally, the customers trust in the financial industry broke during the financial crisis. Through social and demographical changes, the loss of trust gets even worse. Therefore, the continuous over-aging of German society causes increasing costs with direct affects on pensions. Who will inherit these additional costs? The ‘Rürup-comission’ already calculated the upcoming costs caused by pension policy during the legislation period of chancellor Gerhard Schröder. The conclusion was definite: If nothing changes, the young generation in 2040 will pay exorbitant high dues.
Consequently, the so-called sustainability factor got inaugurated. It means in effect that the pension levels are linked to the number of receivers. Thereby, the young, upcoming generation should be relieved to some extent, because an increasing number of pensioners should be financed by a decreasing number of contributors. However, it seems like this model is no longer sustainable in the meantime.
More so ever there will be alternatives in pension schemes, because of the ongoing, technological development and the new disruptive business models in the financial industry, which is the strong opinion of Global Topspeaker Stefan Jenzowsky. The managing director of “2b AHEAD Ventures”, a subsidiary of Europe’s biggest futurology institute “2b AHEAD”, notices since multiple years that digitalisation and AI, next to many other fields in economy and the entire financial industry, cause an enormous turmoil. According to the Global Topspeaker the time for some significant and creative changes, especially in such a traditional industry like the financial one, should be right now. On one hand it would protect the companies from competitive pressure, on the other hand it would open chances for newly developed business plans.
It is a fact that the new and digital competitors like FinTech-corporations became the new strategic leaders and already occupy the contact between customer and the traditional universal banks. Their impact will grow over the next years. In his lecture “Creative disruption in 2025 – Business models of the future”, Stefan Jenzowsky describes how the destruction of business models works, which developments will be enforced, and which business models are interesting for investors. “Without creative disruption there will be no development”, utters the Global Topspeaker, with his view on the world-wide spread, conservative attitude towards the financial world.