L3F Undertakes Year-Long Scenario Initiative Focused on Financial Services Industry to 2050 - Results Predict Major Shifts in Political Influence, Financial Services and Financial Centres
LONDON, England – 11th January 2012 – The L3F (Long Finance Forum of Futurists) today released details of its “In Safe Hands? The Future of Financial Services” report. The report is being published by Long Finance as part of the Financial Centre Futures programme sponsored by Qatar Financial Centre Authority.
This report is the result of a scenario planning exercise conducted by internationally recognised futurists and key figures from the global financial services industry. It plots a series of possible future scenarios for the global financial services market, and considers the future of financial services over the next 40 years. It also identifies a number of surprises which come out of the analysis, ranging from a question mark over the future of insurance to a change in the nature of assets which will be valued.
Long Finance was established in 2007 by Z/Yen Group in conjunction with Gresham College. The Long Finance initiative began with a conundrum– “when would we know our financial system is working?” Long Finance aims to “improve society’s understanding and use of finance over the long-term” in contrast to the short-termism that defines today’s financial and economic views. They publish papers under the Financial Centre Futures programme in order to initiate discussion on the changing landscape of global finance. Financial Centre Futures consists of in-depth research as well as the popular Global Financial Centres Index (GFCI). They have also initiated two other publication series: Eternal Brevities and Finance Shorts. Long Finance is a community which can be explored and joined at www.longfinance.net
Gill Ringland, CEO of SAMI Consulting and Chairman of the L3F commented, “The project has brought together experts across the industry. Our consensus is that as the UK and United States lose influence and power as we head into a world dominated by today’s emerging markets, there is a long term risk to London’s financial services leadership. However, one scenario brought out the potential to leverage its multicultural workforce of over 270 nations and consolidate its position as the melting pot for global financial services.”
The team built on the work in Beyond Crisis to identify macro global factors affecting the world by 2050:
• The global population will grow to nine billion and get older, with most of the additional people in Africa and Asia. This will cause major shifts of economic power, causing turbulence as political shifts follow.
• The new centres of power may not share the value systems of the west, or the Washington consensus.
• Technology (info, cogno, bio, nano) will continue to introduce changes in personal capacity and lifestyles, while ICT will underpin much of society as well as commerce.
• Ecological, energy and environmental limits will be tested or breached as the population increases, the percentage of the population living in cities approaches 70 percent and the new middle class eats meat, uses cars, refrigerators and electronic goods and travels for pleasure.
Within this world, the team developed four possible futures for the global financial services industry;
• Second Hand - the world and financial services are recognisable from today, though most financial services will be largely automated, the current players will have largely disappeared, and many of the new players will be based outside the OECD countries. Land based assets and permits for citizenship or reproduction are highly valued.
• Visible Hand - the world attempts to tackle global financial systemic risks through Washington consensus methods and faces increased volatility. The homogeneous global culture is short-term, consumer-light and carries the seeds of its destruction before 2050. Gold is thought to protect best against volatility.
• Long Hand - financial services are mostly organised around communities of affinity, spanning countries and regions. Assets are allocated by the market within a community and intermediated by technology. The most highly valued asset classes vary with the community: they may be intellectual property and permits to reduce the effect of population pressure; or land-based assets.
• Many Hands - financial services are mostly organised within city states, which differ wildly in their brand and values. Permits to live or operate in desirable city states are highly valuable assets. This could of course be implemented through high property prices rather than a state system.
Gill Ringland commented, “Today, the financial services industry manage capital and debt, but we envisage that by 2050, a primary role of the industry could be to manage ecological, environmental and energy resources. As the population of the globe hits 9 million people, the assets people value today could have been replaced by a permit to live in a city state or to reproduce. The macro global shifts lead us to believe that The City of London may have to transform from a financial centre that trades stocks and bonds to one that manages the availability of water and other permits.
This may seem an extreme leap from today’s world, but, what the last three years should have taught our political leaders and financial services CEOs, is that we cannot predict the future by looking backwards. The L3F provide a series of future scenarios that countries and businesses can assess their thinking strategies against – which could be invaluable in the turbulent world we live in today.”
The L3F and Z/Yen Group will officially launch the report at an event taking place on 25th January 2012, at Gresham College in Barnard’s Inn, London between 09:30 – 12:00 noon.
About SAMI Consulting
Gill Ringland is CEO of SAMI Consulting and the Chairman of L3F. For over 20 years SAMI Consulting has been helping organisations make robust decisions in uncertain times. Known as the home of scenario planning, they provide consulting, education and training, and research, to support robust decisions in uncertain times. SAMI understand the barriers to managing in uncertain times and help clients overcome them and carry through their decisions whilst sharpening their competitive advantage. SAMI understands political, international and regulatory risk, economic uncertainty, social and cultural change, and the opportunities of technology for its clients. www.samiconsulting.co.uk.
Further details on Long Finance and the L3F can be found at www.longfinance.net.
Media Contact: Annmarie Gabriel
Tel: +44 7765 255560
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