Deloitte: In 2014, Banks and Capital Markets Firms Should Consider Focusing on Repositioning for Growth and Agility

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Nov 20, 2013, 03:36 ET

NEW YORK, Nov. 20, 2013 /PRNewswire/ -- "Repositioning for growth" and "agility" will be the key watchwords for banks and capital markets firms in 2014, according to two outlook reports for the year ahead released by the Deloitte Center for Financial Services.

"2014 is likely to be a critical marker for financial institutions, especially when it comes to establishing their growth agenda," said Bob Contri, vice chairman, Deloitte LLP, and the national industry leader of Deloitte's financial services group. "Banks and capital market firms are expected to continue to be faced with a challenging and changing market, and it's easy to get bogged down in the smaller details. While many have started repositioning themselves for growth already, 2014 looks as though it will be when the pace quickens and market leaders distance themselves from the pack."

The reports find that financial institutions will continue to see margins under extreme pressure next year, and that business models and product structures will likely become more standardized. Regulatory concerns will shift, from uncertainty over direction to uncertainty over long-term outcomes. Agility - the "ability to rapidly and thoughtfully respond to changing conditions, moving seamlessly from one position to another" - may be key, especially when it comes to strategy.

"Agility might be one of the most crucial traits in creating success as the industry re-enters a growth environment," said Jim Eckenrode, executive director of the Deloitte Center for Financial Services. "Banks and capital markets firms will likely continue to adjust to regulatory pressures, even as they try to remain relevant to clients in 2014. Enabling a more agile enterprise will most likely be key to both. The practical application of agility will require a combination of leadership attention, process standardization and an effective talent strategy."

Among the other areas that the 2014 banking outlook (titled "Agility in a Re-Regulated World") and the 2014 capital markets outlook (titled "New Models for a New Era") focus on:

Re-regulation being the new norm.
New technologies enabling a new era.
M&A spurring increased competition.
Customer experience hinging on new ways to differentiate.
Chief financial officers taking their role in strategy to the next level.

Based on original research, as well as the insights and first-hand experience of many of Deloitte's leading banking and capital markets practitioners, the two outlooks were the focus of a keynote address by Contri this morning at the Mergermarket Financial Services M&A Symposium in New York.

Both outlooks can be found online at www.deloitte.com/us/2014outlooks/bankingandcapitalmarkets.

About the Deloitte Center for Financial Services
The Deloitte Center for Financial Services, launched in 2007, provides insight and research to help improve the business performance of banks and capital markets firms, private equity firms, hedge funds, mutual funds, insurance providers, and real estate organizations operating globally. Headquartered in New York City, the Center is staffed by a group of professionals with a wide array of in-depth industry experience, as well as cutting-edge research and analytical skills. Former American Bankers Association leader Don Ogilvie serves as the independent chairman of the Center and also includes Howard Mills, a director with Deloitte Services LP, as a chief advisor.

As used in this document, "Deloitte" means Deloitte LLP and its subsidiaries. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.