ARTICLE OF THE MONTH: “Memo to the CEO: Are You the Source of Workplace Dysfunction?” – McKinsey

REVIEWS OF THE WORLD’S LEADING INSIGHTS NOVEMBER 2017

IN THIS ISSUE

T H E I N S I G H T S R E V I E W

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STRATEGY & TRANSFORMATIONCORPORATE FINANCE / M&AHUMAN CAPITAL RISK & COMPLIANCE

CYBER SECURITYMACRO FINANCIAL SERVICESRETAIL & BUSINESS BANKING GENERAL INSURANCE

MARKETING & CUSTOMER EXPERIENCETECHNOLOGY INNOVATION & DISRUPTIONPAYMENTS

T H E I N S I G H T S R E V I E W

About this ReportThe Insights Review – Financial Services Edition by ICG presents timely abstract reviews of the most relevant ‘open published’ perspectives and research reports from the world’s leading branded management consulting firms.This publication ensures that executives and their internal consultants are exposed to the widest range of high quality ideas, techniques and methodologies developed across the management consulting industry globally.Relevant insights are identified and classified once only, either in a general category, or by topic alignment to an industry segment or a functional area using our proprietary taxonomy.

Access to Full ReportsIf you find an insight review of interest and wish to access the full report, simply follow the link beneath the title. Where possible, this will take you to the full report. Occasionally, the publisher may require the user to complete a registration or payment process prior to accessing the report.Links are current at time of publication.

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• Accenture• AT Kearney• Bain• BCG• Capgemini• Deloitte• Ernst & Young• FMCG• Huron Consulting Group• IBM• King & Wood Mallesons• KPMG• L.E.K. Consulting• Macquarie University• McKinsey & Company• OC&C• Oliver Wyman• Parthenon• Promontory• PwC• Roland Berger• Strategy&

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Message From the Editor,Welcome to the latest edition of The Insights Review – designed to save you hours and hours wading through articles from over a dozen consulting firms. ICG’s researchers and subject matter experts around the globe have found and curated the better articles and reviewed them so you only need read the ones that count.

This month, we see a focus on technology-driven transformation in the Strategy, Technology, and Innovation sections.

Our payments section also has a great batch of articles, but our Article of the Month goes to one from the Human Capital section. It is a provocative and entertaining article entitled:

“Memo to the CEO: Are You the Source of Workplace Dysfunction?” – McKinsey

We hope you enjoy this edition – and if you do, please forward to your contacts and colleagues. Additionally, if you see merit in a co-branded version for your organization (as leading professional associations and clients around the globe already do) then please contact our marketing manager for more details (refer to details on p35).

As this time next month is the holiday period for many of our Southern Hemisphere colleagues, we produce a combined Dec-Jan edition to kick off the new year. Sadly, that means this will be our last edition for 2017 – so many thanks to our now hundreds of thousands of readers around the globe. I’d also like to extend my thanks to our very talented team of researchers and reviewers, who work with our fabulous production teams at ICG and leading professional associations to produce a journal of which we are all very proud.

All the best to you and yours for the holiday season,

David MoloneyGlobal Editor

David MoloneyGlobal Editor

AboutDavid has enjoyed a stimulating career in the global financial services industry. Unusually for a consultant, he spent the first decade of his career working in banking from retail stores to helping the CEO with consulting firm led transformation projects. Transitioning to consulting via an MBA, he has spent more than two decades serving every segment of the industry in many countries. Importantly, as a global partner at two leading firms, he was well known for developing fresh firm and industry insights and in one firm, was directly responsible for leading the authorship of the most significant global reports for release at the World Economic Forum.

T H E I N S I G H T S R E V I E W

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Macro Financial Services 23

Retail & Business Banking 25

General Insurance 26

Industry-Specific Topics

The Best Insights from the Past 12 Months 27

The Insights Review Team 34

An Introduction to Internal Consulting Group 36

Special Feature | Contributors | About ICG

Strategy & Transformation 06

Corporate Finance / M&A 07

Human Capital 08

Risk & Compliance 11

Marketing & Customer Experience 12

Technology 13

Innovation & Disruption 16

Payments 18

Cyber Security 20

Cross-Industry Functional Topics

Cross-Industry Functional Topics

In this Section: Strategy & Transformation | Corporate Finance / M&A

Human Capital | Risk & Compliance | Marketing & Customer ExperienceTechnology | Innovation & Disruption | Payments | Cyber Security

© Internal Consulting Group Pty Ltd 20175

Cross-Industry Functional Topics

Strategy & Transformation

“Disruption, Friction, & Change: The Hallmarks of a True Transformation” – McKinsey

VIEW PDF (11 PAGES)

We all understand business-as-usual only too well. But every so often, we are confronted with business

situations when we have to defy convention and blow the doors off business-as-usual. The consequence is often the need to transform. However, organizational transformation is complex and prone to failure.

This article – a podcast transcript - is a good complement to the previous article on ‘Secrets of Successful Change Implementation’. Very senior, experienced transformation specialists weigh in with their knowledge on what it takes to successfully undertake large transformation programs.

Disruption, Friction and Change – the title of the podcast – really captures the essence of what really happens in large transformation programs.

If you are a change manager looking for insights on why so many transformation programs fail, or what it takes to execute a successful transformation, then reading this podcast transcript will be a good investment of your time.

“Secrets of Successful Change Implementation” – McKinsey

VIEW PDF (9 PAGES)

This is a gem of an article. Anyone who has led a major change implementation program will immediately relate

to each and every one of the success factors listed. Read and re-read the article and you will discover nuggets of knowledge you can use in your change implementation programs. For example: you cannot underestimate the importance of gutsy leaders who are able to create a sense of change implementation ownership and commitment at every level of the organization. Another example: Communication throughout the change process is crucial and creating a buzz – by telling a story that motivates and engages the organization – is a key factor in achieving sustainable change.

The article is based on surveys of over 2000 executives and 900 companies. It rightly highlights that those that have the ability to focus their organization on a prioritized set of changes and actively manage risks have more successful change efforts compared to those who do not. Successful change implementations need to be staffed with the right kind and right amount of resources, with clear accountabilities. Finally, a well-structured and well-run PMO will go a long way in coordinating a successful change implementation program.

Highly recommended read for anyone who is involved in implementing a large change program.

Reviews by: Gopal Sondur | CEO Stockholm HUB & Strategy Practice Leader | Contact

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Cross-Industry Functional Topics

Corporate Finance / M&A

Review by: Richard Dale | ICG Subject Matter Expert | Contact

“Focusing Your M&A Team on Revenue Growth” – McKinsey

VIEW PDF (6 PAGES)

Costs are certain but revenues are not. In this short article, McKinsey reminds us that as much attention

needs to be given to realizing revenue synergies in a merger as are given to extracting cost savings. In particular, the authors discuss the need for enough of the right people to be involved upfront to define realistic revenue targets for the merger, and in planning the integration of the sales organizations – which, if botched, will lead not to revenue synergies but revenue losses. It also recaps general advice such as: make sure your senior leaders are engaged, put your best people in the integration teams, and manage cultural differences.

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Cross-Industry Functional Topics

Human Capital

Review by: Michael Roch | ICG Global Practice Leader | Contact

“Wellness at Work: The Promise & Pitfalls” – McKinsey

VIEW PDF (4 PAGES)

This short article is a conversation between two senior McKinsey consultants and a neuroscience leader,

all discussing different perspectives on the return on investment in employee wellness and well being.

It’s well-written and easy to digest. While the article doesn’t provide any brand-new insights, any C-suite or CHRO should skim it – and forward it to the reluctant CEO and CFO – as another reminder about how much employee well-being matters in a service-oriented world.

“Performance Management: Why Keeping Score Is so Important, & So Hard” – McKinsey

VIEW PDF (10 PAGES)

In this longer piece, McKinsey summarizes the seven most common vulnerabilities of most performance

management systems. It’s somewhat ironic that the authors start with “poor metrics” as pitfall number one: from ICG’s performance management improvement work, we know that the key reason why most metrics are, well, poor, is that they are developed first – and before common objectives, shared views about the means to operationalize these objectives, and so on.

The article recovers nicely by addressing the importance of forward-looking measures, enforcing standards for every workflow, and the role of leadership in setting standards.

All in all, the article both serves as a solid reminder about what to do about broken performance management systems, and at the same time takes a slightly different angle on what good performance management looks like when compared against most recent articles on the issue (reviewed in previous TIRs). It’s a worthwhile read for CHROs and internal consulting teams.

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Cross-Industry Functional Topics

Human Capital

ARTICLE OF THE MONTH

“Memo to the CEO: Are You the Source of Workplace Dysfunction?” – McKinsey

VIEW PDF (10 PAGES)

The title is being polite.

Once you get past the benign title, this entertaining and highly readable article asks CEOs the following question: Is it your fault that your company is full of jerks?

The article provides a nice seven-factor self-assessment and then five ways to tackle the problem. Highly insightful and entertaining at the same time – a recommended read for all, especially those who want to do something about how they affect others.

Review by: Michael Roch | ICG Global Practice Leader | Contact

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Cross-Industry Functional Topics

Risk & Compliance

Review by: Egbert Schaefer | ICG Practice Leader Risk & Compliance Management | Contact

“The Evolving AML Journey” – Accenture

VIEW PDF (11 PAGES)

For KYC (Know Your Customer) and AML (Anti-Money Laundering) processes, Accenture’s article evaluates

the necessary journey of an organization to reduce cost, increase operational processing, ensure compliance, and maintain high quality.

On that journey, standardization and centralization may have contributed to strategic objectives already. However, outsourcing and automation could further increase cost efficiency and operational productivity while maintaining compliance as well as quality standards.

The article is recommended for readers who want to understand the general impact of robotics on KYC & AML processes. Other readers may find additional insights elsewhere, e.g. application of artificial intelligence or machine learning.

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Cross-Industry Functional Topics

Marketing & Customer Experience

Review by: Lisa Hickson | ICG Subject Matter Expert | Contact

“Managing Agility: Resolving the Tension Between Marketing & Technology” – Oliver Wyman

VIEW PDF (5 PAGES)

This Oliver Wyman Articles talks about the classic tension that arises around product development

between marketing teams (the specifiers) and technology team (the deliverers). There is truth in the stereotypes that marketing teams are often focused on delivering new CVPs to customers at seemingly any cost, and technology teams are generally more focused on delivering a minimum viable product within budget. It notes that tension can be worsened in an agile environment, especially with a fixed price project costing. The authors call for more collaboration, cross-functional education, and effective hands-on management of the agile development process. Finally, they suggests five practical steps for creating harmony and driving effective outcomes.

A worthwhile short read.

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Cross-Industry Functional Topics

TechnologyReviews by: Christophe Amoussou | ICG Practice Leader IT & Transformation | Contact

Karen Ryan | ICG Practice Leader IT Strategy | Contact

“Five Robotic Process Automation Risks to Avoid” – Oliver Wyman

VIEW PDF (7 PAGES)

A short article from Oliver Wyman, identifying five key pitfalls to avoid while implementing Robotic Process

Automation (RPA).

In this paper, the author is goes beyond stating obvious RPA benefits (including ease of deployment), to present the key challenges to address in order to fully take advantage of this new technology while avoiding the creation of another legacy “albatross”.

An insight of value to all internal consultants and any executive assessing their RPA options.

“Emerging Technologies & The Finance Function” – Oliver Wyman

VIEW PDF (5 PAGES)

In this article, Oliver Wyman presents a compelling study on the impact of emerging technologies on the finance

industry.

This paper resulted from a summit meeting of Finance and Treasury executives, organized by the Association for Financial Professionals (AFP) and moderated by Oliver Wyman. The event title was: “Is the Finance industry ready for the 4th industrialized revolution?”.

The article reviews and exposes the benefits and pitfalls of emerging technologies such as Artificial Intelligence (AI), blockchain, and the Internet of Things (IoT).

The insight has particular merit because of the many use cases and the exhaustive list of challenges to be aware of when evaluating these new technologies.

A great cheat sheet for CTOs, CFOs, and internal consultants to keep handy whenever facing or thinking technology disruption.

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Cross-Industry Functional Topics

Technology

“Business Technology Performance Index 2017/2018” – Capgemini

VIEW PDF (36 PAGES)

This article from Capgemini provides a summary of responses to their Business Technology Performance

Index survey, as well as a discussion of its key findings. It also provides insights into the continuing evolution of technology.

Interestingly timed, as this report is very similar in its content (AI, Blockchain, IoT) and its audience (Finance, CxO) to the Oliver Wyman study on Emerging Technology and the Finance Function also reviewed in this section. However there are two notable differences. First, this article gives us a valuable perspective about the customer experience impact. Secondly, it also dives into more detail into its operating mode.

An article deserving a wider audience, to be read by C-level executives while commuting, and also of interest to internal consultants.

Reviews by: Christophe Amoussou | ICG Practice Leader IT & Transformation | Contact Karen Ryan | ICG Practice Leader IT Strategy | Contact

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Impact of Telematics on Automotive Insurance

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“How to Break Through the Gravitational Pull of Your Legacy Organization” – McKinsey

VIEW PDF (5 PAGES)

Another article about how to digitally transform and overcome organizational inertia. Rather than

incremental changes, it advocates moving fast at scale.

Some examples of techniques others have used are described, but this is not a discussion of a complete digital transformation framework or methodology.

“The Advance of AI Is Uncertain. But That Doesn’t Mean We Can’t Prepare for It” – Oliver Wyman

VIEW PDF (8 PAGES)

An unoriginal article about the impacts the exponentially increasing capabilities of AI will have on workers and

employers.

Many people will be made redundant, while at the same time employers will need to retrain or hire many people for new skills complementary with AI.

Hopefully a more insightful follow-up article will be published soon.

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“How Digital Reinventors Are Pulling Away from the Pack” – McKinsey

VIEW PDF (12 PAGES)

A better article about digitally transforming organizations and business models. This one also advocates a

bold approach rather than incrementalism, based on survey findings that show companies that fully commit to digital transformation grow revenue and profits faster than digitally tentative rivals in their industry. Rather than fiddle at the edges, these companies use digital to transform their core business, create new products and services, launch new businesses, and enter new industries. Some case study examples would improve this article by bringing the survey findings to life.

“Product Management in the Age of Disruption” – Bain

VIEW PDF (3 PAGES)

This article revisits the benefits of selling customers solutions, rather than pushing narrowly defined

products. Its focus is blinkered product managers in technology companies who would do better if their organizations empowered them to span product silos and think like “offer managers”, looking at things from their customer’s perspective to pull and push their organization to provide integrated solutions that meet customers’ needs. Except for introducing the label “offer manager”, and using “tech” companies as the examples, the issues and ideas in this article would be familiar to marketing managers of decades ago.

Cross-Industry Functional Topics

Innovation & Disruption

Reviews by: Richard Dale | ICG Subject Matter Expert | Contact

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Cross-Industry Functional Topics

PaymentsReview by: Ryan McQueen | ICG Global Payments Practice Leader | Contact

K Paul Blond | ICG Subject Matter Expert | Contact

“Achieving Top of Digital Wallet” – Oliver Wyman

VIEW PDF (12 PAGES)

This article provides a view of digital payments and its impact on credit card issuers’ ability to drive top-of-

wallet preference, as well as the shift from card-based competition to transaction-based competition.

The article outlines the issues card issuers will face and focuses on the need to move to transactional-level decisions at a real-time card issuing and digital wallet space.

“Merchant Payments Digest: 6th Edition” – Oliver Wyman

VIEW PDF (7 PAGES)

A quarterly, well-positioned synopsis of a selection of topics. Covered across a number of articles are:

Amazon’s patent expiry for one-click checkout, the Bank of China’s mandate for mobile payments to be centrally cleared starting in June 2018, the slow speed of EMV transactions in the US (and what Visa and MasterCard are doing about it), Featurespace, (a new, machine-based analytics firm tackling card fraud detection and prevention), and Square entering the lending and deposit sectors.

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“International Payments in a Digital World” – Accenture

VIEW PDF (12 PAGES)

The article takes a position that international payments is a space which has largely remained unchanged

by the digital revolution, and that there is substantial room for improvement. The article also contains a list of initiatives around the world where services are seeking to improve cross-border payments and regulation, with these services designed to allow for greater standardization and competition in real-time value transfer.

“Driving the Future of Payments” – Accenture

VIEW PDF (15 PAGES)

A great article with a page each covering the top 10 trends in payments, including Generation Z, customers

welcoming open access to their financial information, the peak of bank-led rewards, payments innovation through fintech and banking partnering, and several others.

A thought-provoking – based on the topics covered – as well as a productive and quick read.

Cross-Industry Functional Topics

Payments

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Review by: Ryan McQueen | ICG Global Payments Practice Leader | Contact K Paul Blond | ICG Subject Matter Expert | Contact

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Cross-Industry Functional Topics

Cyber Security

Reviews by: Mike Trovato | ICG Practice Leader Cyber Security | Contact

“Preparing to Face Cyber Attacks” – EY

VIEW PDF (32 PAGES)

One of the longest-running and most valued cyber security surveys, the 20th annual EY Global

Information Security Survey (GISS) explores cybersecurity issues facing its clients, over 1200 of whom participated globally. The article builds on prior surveys and, similar to other “Big 4” competitors, references additional non-EY information. It covers familiar territory on business engagement and investment, and threats and response to incidents, as well as highlighting the need for resilience. A good overview for executives and boards.

The survey said only 4% are confident of their cyber strategy and only 12% believe they would detect a sophisticated attack. These are stats worth examining.

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Industry-Specific Topics

In this Section: Macro Financial Services | Retail & Business Banking | General Insurance

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Industry-Specific Topics

Macro Financial Services

Reviews by: David Moloney | ICG Global Practice Leader Financial Services | Contact

“Setting an Agenda for Organic Growth in the Digital Age” – McKinsey

VIEW PDF (11 PAGES)

A podcast and transcript which reconstitutes an important digital growth insight from April. The idea is

that growth is driven through three lenses: Performance (operational excellence), Creation (new revenues), and Investing (reallocation of resources).

The insight reminds us that over half of companies that don’t grow don’t survive, so more companies should be trying to break away from their momentum trajectory.

Two additional insights include the suggestion that growth often isn’t treated with the same disciplines of sponsorship, focus, and benefits tracking, and that most executives come to the growth table with a bias towards one of the three growth lenses.

A useful recap and reinforcement of an important strategy framework.

“Remaking the Bank for an Ecosystem World ” – McKinsey

VIEW PDF (9 PAGES)

A biannual review of the performance of 1000 banks by a platoon of McKinsey partners. The result is a too-

short and thin wake up call on platformization, imbued with advertorial on no-regrets digital transformations.

On the bright side, it contains two exhibits useful to internal consultants: a country and regional analysis of the drivers behind biannual changes in ROE, and a much-needed (but opaque) analysis of manufacturing versus distribution, which adds empirical authority to the well-established notion that distribution is more valuable than manufacturing (see exhibit 5).

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Industry-Specific Topics

Retail & Business Banking

“Zero Based Everything (ZBX) for Banking” – Accenture

VIEW PDF (16 PAGES)

Part 1 outlines the key thesis that in order to continue on the path towards true digital transformation,

retail banks need to be “future-ready”, including being sufficiently profitable to free up capital to invest in digital systems and infrastructure.

Traditional cost-cutting has achieved incremental reductions within the range of 10-15%. Further transformation will require much deeper reductions, and future-state banks will need to operate at cost to income ratios of below 40% – which can only be achieved by significantly re-imagining the black box of centralized banking functions. Worth skimming, while noting that this is preamble for Part II… which can be skipped by those uninterested in Accenture’s pitch for its newest cost reduction methodology based on zero-based budgeting.

Reviews by: Julian Cappe | ICG Practice Leader Retail & Business Banking | Contact

Innovation in the Business Banking Value Proposition

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Industry-Specific Topics

General Insurance

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“Ecosystems: How Insurers Can Reinvent Customer Relationships” – Bain

VIEW PDF (3 PAGES)

An extremely helpful article from Bain based on a global survey of their customers.

The insight repeats something ICG has been advising its insurance company clients for nearly two years: that full-service firms should quickly evolve to platform-based ecosystem business models, where the insurer becomes the centre of gravity around key areas such as the household and mobility solutions. As this early stage of evolution of this business model, articles like this provide confidence to pioneers through both empirical data support and case studies; the latter includes Ping Ang, which is well known already, and Brazil’s Porto Seguro, which is new to the literature.

“Accenture’s Insurance Technology Vision 2017 Report” – Accenture

VIEW PDF (30 PAGES)

A rehash of previous material in slide form, this article highlights some edgier trends in technology that are

impacting insurers. While we liked the earlier article a lot, some of the richness is lost in PPT – but it still acts as a great refresher or introduction if you don’t understand the impact of areas like AI, blockchain, and platform-based ecosystems on insurance.

Reviews by: Peter Dale | ICG Subject Matter Expert | Contact

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REVIEWS OF THE WORLD’S LEADING INSIGHTS

T H E I N S I G H T S R E V I E W

© Internal Consulting Group Pty Ltd 2017

ARTICLES OF THE MONTHT H E B E S T I N S I G H T S O F T H E P A S T 1 2 M O N T H S

“Where is Technology Taking the Economy?” – McKinsey

VIEW PDF (11 PAGES)

First, a big thanks to W. Brian Arthur – independent professor – for bringing McKinsey and us (ICG readers)

thought leadership on the highly talked about subject that is the socio-economical impact of the new industrial era.

What a refreshing and thorough article this is! The author goes beyond the common debate of whether or not the 4th revolution will destroy or create more jobs, instead positioning the debate on the need for adequate distribution of the production/productivity gain from this revolution. He makes reference to the universal revenue trial in the Scandinavian countries, and to John Keynes predictions back in the 1930s, and provides plenty of relevant examples.

Lastly, the author also reminds the politicians that if they don’t act on new social policies, they will most likely be forced by the people to do so – as has been the case throughout history.

A very interesting and compelling article that you will enjoy reading.

“Build & Protect Firm Reputation” – Accenture

VIEW PDF (12 PAGES)

This is a great step-up article by Accenture in a field they are not famous for. Accessible and containing some

excellent new material, this insight is well worth reading for executives and internal consultants needing to be across all the major frameworks required to manage conduct risk.

The headline here is that the aggregate misconduct bill across the industry over a 7 year period is a staggering US$300B!

Of more utility to internal consultants and their clients is a well-engineered reputation driver framework that highlights governance and community as the two key drivers that are directly related to conduct and behavior.

The insights include five thematic challenges for a conduct program, a powerful inherent conduct risk danger framework (that we haven’t seen before), some myth busters, and an approach framework and overview of three lines of defense that everyone should keep on their hard drive.

Articles of the MonthThe Best Insights of the past 12 months

SEPTEMBER 2017OCTOBER 2017

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Articles of the MonthThe Best Insights of the past 12 months

JULY 2017

“Technology Vision for Insurance 2017” – Accenture

VIEW PDF (56 PAGES)

Longish but very powerful must-read annual surveybased review of how technology is reshaping

insurance. It is brimming with cutting-edge case studies, thumbnail technology applications, and useful factoids. The last page of each section ends with startling predictions.

The authors cover five main trends:

1. AI is the new UI (which observes that AI is hitting the front office and substituting for humans, or augmenting them, to give even better advice).

2. Partnership models are evolving to powerful ecosystem plays. A great summary of much of the platform material we have seen before, but adds the idea that voice activated platforms will lead.

3. Workforce marketplace. Outlines the role of the various liquid labour platforms within the insurance industry, with bold predictions for labour changes.

4. Design for humans. Summaries the way the insurance proposition is being embedded into the customer journey and augmented with new technology.

5. Invent new industries and set new standards. Describes how industry boundaries are blurring through ecosystems and how principal agent economics are being transformed with blockchain-like technologies supporting performance-based contracts.

Definitely worth a read for all internal consultants and all executives (insurance and other sectors), and a worthy winner of our ‘Article of the Month’ award.

AUGUST 2017

“Sizing the Prize: What’s the Real Value of AI for Your Business & How Can You Capitalise” – PwC

VIEW PDF (24 PAGES)

PwC examines the improvement potential of AI and how it can be applied to generate specific benefits. As with

Accenture’s report also reviewed here, the authors define AI as systems that can sense their environment, think, learn, and act autonomously. PwC goes on to classify AI in four ways: process automation, human assistance, augmented intelligence, and autonomous actors.

The report focuses on the value that can be created, and outlines the economies and businesses with the greatest potential for improvement. PwC sees AI as a big game changer that possesses the greatest potential to transform operations and business models. The report cites specific opportunities to reduce cost through process automation, improved decision-making, and revenue growth driven by more personalization, innovation, and improved CX.

This is a high quality report from PwC, building on its extensive experience with global surveys. The report projects specific improvement potential for select economies and industries. Similar to the Accenture report, the value lies in raising awareness and as a call-to-action rather than the precise percentage improvement reported.

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Articles of the MonthThe Best Insights of the past 12 months

APRIL - MAY 2017

“What Deep-Tech Startups Want from Corporate Partners” – BCG

VIEW PDF (12 PAGES)

“Deep-tech start-ups” are built around unique, differentiated technologies that are hard to reproduce.

They are different from start-ups that are merely technology-enabled. This distinction matters because their business and revenue models tend to be complicated, and investors thus evaluate them differently. BCG surveyed more than 400 deep-tech start-ups to understand their needs of preferred partners, such as venture capitalists, corporate VC funds, incubators and the like.

The article does a superb job explaining what it takes for an ecosystem of incubator, university, corporate support, VCs and the public sector to meet a deep-tech start-up’s thirst for funding, market access, technical and business knowledge, facilities access and – importantly – talent (see Accenture’s excellent study on the modern work force elsewhere in this edition of TIR).

BCG’s article is a particularly excellent read for the C-suite and platform executives of large corporates who seek to accelerate their innovation by collaborating with start-ups.

JUNE 2017

“The Business Logic in Debiasing” – McKinsey

VIEW PDF (9 PAGES)

Have you ever wondered where overconfidence exhibited in financial markets comes from (e.g., from

personal traits or from experience)? And is it selected by, or limited by, organizational design? Or, can psychological theories of strategic naiveté (which were developed to fit controlled laboratory experiments based on game theory), also help explain naiveté in financial decisions?

This excellent article aims to provide you with insights into biases that effect decision-making, both at a personal level as well as at a system level. It also shows you some ways to de-bias your decision-making.

It’s a great read for board members and Executive leadership across many industries, and especially financial institutions.

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Articles of the MonthThe Best Insights of the past 12 months

JANUARY - FEBRUARY 2017MARCH 2017

“Top 10 Trends in Wealth Management 2017” – Capgemini

VIEW PDF (28 PAGES)

A well-structured follow-up to last year’s excellent report providing a brief snapshot of the major trends

impacting wealth firms globally. The trends this year are significantly different to last year’s list. Some may turn out to be well ahead of the game, e.g. AI-based analytics is a bridge too far for most wealth firms. Others making the list this year have been around for many years, e.g. inter-generational wealth transfer, and the pressure to shift from asset-based fees. One trend not discussed is the emerging challenge of data ethics, in particular the amount of external data to capture on clients and how to use it in ways that clients deem acceptable. Profit-for-member pension funds are just beginning to realize this is an area where they can sustain significant competitive advantage over their profit-for-shareholder competitors. Overall, the article is a good summary of the challenges facing the industry globally, without going into detail about potential solutions. Useful reading for industry executives and internal consultants.

The New Battleground for Marketing-led Growth – McKinsey

VIEW PDF (14 PAGES)

An impressive article from McKinsey. It re-presents the consumer decision journey, a systems dynamics

approach to customer purchase behavior backed up by an increasing body of evidence which drives internal consultants to help their organization focus on what matters. Loyalty programs are expensive and less important as loyalty amongst customers falls. Instead, organizations should focus on ensuring they are within the initial consideration set and create a centre of gravity through ongoing product, service, and brand news.

This insight is a worthy winner of our ‘Article of the Month’.

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Articles of the MonthThe Best Insights of the past 12 months

NOVEMBER 2016DECEMBER 2016

“Insurers Need to Plug into the Internet of Things – or Risk Falling Behind” – McKinsey

VIEW PDF (10 PAGES)

A well-written 10-pager which recognizes that this theme dates back to 1999, and there are already more things

connected to the internet than people. Some staggering data shared!

The article considers four product segments – car, home, health, and commercial – and covers some familiar territory. The emergence of co-opetition is well set-out, as are the needs for clear visioning by boards and executives to ensure traction. Whether companies consider they can innovate forward or embrace real disruptive change head-on is the key question being posed again.

Given the powerful introduction and scene-setting, this article is a must read for senior executives. Some themes are not new, but the overall journey steps and the five fundamental assets in the McKinsey “Global IoT in Insurance” framework are very well set out. A worthy winner of our ‘Article of the Month’ award.

“Digital Transformation in Financial Services” – Deloitte

VIEW PDF (28 PAGES)

A worthy winner of our ‘Article of the Month’, this is an excellent ‘Act Now!’ insight. In order for FSI firms to

survive and thrive, (digital) evolution is inevitable and DNA mutation is part and parcel of that evolution. This is the essence of Deloitte’s argument. It addresses all the typical types of mutation (albeit in business language) viz., substitution, insertion, deletion and frame shift. Preparing your organization, culturally, skills, and capabilities-wise, for such mutation is at least as critical as strategizing to evolve.

The article provides very good content to understand which evolutionary branch type your firm fits and also outlines a robust approach to rewiring your firm’s DNA. A must-read for senior management, particularly those who have been appointed as Head of Digital Innovation. Make your read even more interesting by following the case studies in the article in more detail. Also, learn about customer-centricity (one of the key attributes of the Digital DNA) from ICG’s own Global Thought Leader – Stephen Hewett. (stephen.hewett@internalconsulting.com).

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Articles of the MonthThe Best Insights of the past 12 months

AUGUST 2016OCTOBER 2016*

“Distributed Ledgers in Payments: Beyond the Bitcoin Hype” – Bain

VIEW PDF (12 PAGES)

Probably the best and most thoughtful article exploring the opportunities (and threats to incumbents) of

distributed ledgers in payments that we have read for some time, and well worth reading.

The report predicts a range of developments focused on international payments and provides some detailed insights into how correspondent banking and trade finance might embrace digital ledger technologies.

The report also touches on implications for domestic payments – as yet a little way off, but if realized, of profound consequence.

A thoroughly well-deserved ‘Article of the Month’.

“Capital Markets & Investment Banking 2016: Time for Tough Choices & Bold Actions” – McKinsey

VIEW PDF (48 PAGES)

Regular readers of the CIB section of The Insights Review will recognize that this paper by McKinsey is

another in the stack by all the branded consultants on the same set of issues facing this sector. As the title suggests, many participants have not yet made their choices, never mind put them in to action.

The paper is of the high quality one would expect from this firm. It starts out with data, analysis, and insight to succinctly lay out the challenges facing the sector. This is followed by four mutually exclusive, potentially winning business models to choose from – based on the organization’s capabilities (or put another way, resources and strategic purpose). Finally, it concludes with eight action initiatives, irrespective of which business model fits best.

In your reviewers opinion, this is the most comprehensive, insightful, and pragmatic action-oriented paper on this topic he has reviewed. It is highly recommended for CIB leaders and their advisors/internal consultants.

To quote from the paper, “The road to a sustainable future remains open for CMIB banks, but only if they make tough choices and take bold actions now.”

A worthy winner of our Article of the Month award.

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CHIEF REVIEWERDavid Moloney ICG Global Practice Leader Financial Services

EDITORAndrew Wilson

INSIGHT REVIEWERSThe Insights Review draws its insight reviewers from over 1000 of the most senior professional consultants around the world.

Key contributors this month include:

The Insights Review – Financial Services Edition TeamCandidate insights are compiled by an expert team of researchers. Reviews are written by partner-level subject matter experts from our industry and functional practices.

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Christophe Amoussou ICG Practice Leader IT & Transformation

Egbert Schaefer ICG Practice Leader Risk & Compliance Management

Gopal Sondur CEO Stockholm HUB & Strategy Practice Leader

Julian Cappe ICG Practice Leader Retail & Business Banking

K Paul Blond ICG Subject Matter Expert

Karen Ryan ICG Practice Leader IT Strategy

Lisa Hickson ICG Subject Matter Expert

Michael Roch ICG Global Practice Leader

Mike Trovato ICG Practice Leader Cyber Security

Peter Dale ICG Subject Matter Expert

Richard Dale ICG Subject Matter Expert

Ryan McQueen ICG Global Payments Practice Leader

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