Developments in the world of financial services are happening at the speed of light. The rise of technology and digitalisation greatly affects all financial services providers, from banks, insurance companies and pension funds to intermediaries, new payment services providers and investment institutions. Political uncertainty also plays a major role in the market, not just in the Netherlands, in light of the new Dutch pension agreement, but globally as well, for instance when it comes to trade conflicts and Brexit.

These pages highlight the key aspects per subsector.

Future-proofing your organisation

The complex and rapidly changing market requires financial institutions to be alert and agile at all times. For existing organisations, this may mean having to adapt their traditional products and related business models. Many conventional insurance products, for instance, are threatening to become obsolete. Let’s say that P&C policies are your core business. What’s the use of this type of insurance in a world of self-driving cars? Who will still be taking out P&C policies from you? And how future-proof are pension products, now that a new generation that’s not interested in long-term employment contracts and prefers to live in the here and now, is entering the labour market?

For new entrants to the financial services market such as fintech companies the main challenge is the transition from a relatively free to a strictly regulated market. Non-financial institutions don’t have a history of dealing with regulatory restrictions, which is why they need a lot of help with their compliance and risk management procedures. These organisations don’t have to be taught how to do business, but learning how to deal with a regulator that’s looking over their shoulder is a different thing altogether.

Impact of data

Data is the new gold, and that’s true for for the financial sector too. Compliance with rules and regulations is still a major concern of course, but the huge volumes of data that are available to many financial institutions, whether in digital or analogue form, offer many opportunities as well. Organisations that manage to use this data intelligently can draw in new customers or provide better services to existing customers.

As opposed to opportunities, data also comes with cyber-risks. To mitigate these risks, organisations have to make the right decisions and set priorities. This means that you need to pinpoint what your ‘crown jewels’ are in terms of data and identify any vulnerabilities your organisation may have so that you can take appropriate action when the time comes.

IBOR transition

The IBOR transition is an important current development within financial services. As of 1 January 2022, the current IBORs will no longer comply with the EU Benchmarks Regulation (BMR). As a result, they need to be replaced by alternate reference rates. The IBOR transition will have a major impact on financial services providers that use IBORs. The change of reference rate will not only affect existing contracts, but also internal departments such as Legal, Compliance, IT & Infrastructure, Accounting & Tax as well as the front office. To assess this impact, organisations  need to map out which contracts, systems and processes feature IBORs and which steps must be taken to bring the IBOR transition to a successful conclusion. Here you can read more information about the IBOR transition and how BDO can help you. 

What BDO can do for you

We don’t take a one-size-fits-all approach but always provide tailor-made services. Our advisory opinions are professional and pragmatic. Our services are multidisciplinary and personalised, and we put together teams of experienced specialists who never lose sight of the identity of your organisation.

We don’t believe in in-depth theoretical methods; they are likely to become outdated before you know it. The usefulness of an advisory opinion lies in its agility, riding the wave of developments in the market and being attuned to your specific needs and requirements. This is how we can help your financial institution focus on strategy, customer relations, profitability and capital allocation. We also offer in-control and regulatory compliance services, as well as services relating to financial reporting, audit & assurance, decision-making on markets/jurisdictions, licence applications and cybersecurity issues.

Want to find out more about how BDO’s Financial Services sector group can help your organisation? Please feel free to contact one of our specialists for an informal chat with no strings attached.