The impact of the crisis on different sectors of the financial services sector had varied enormously. Unsurprisingly, banks had been hardest hit - and despite an improvement in financial conditions in 2009, concerns remained about the sustainability of their recovery. At the other end of the spectrum, insurers had emerged relatively unscathed.

The Structure of Financial Services

The individuals interviewed for this Report all foresaw great changes in the shape of the financial services industry in the next two decades – though some of the industry’s critics thought they were unlikely to be enough. Predictions included:

• Global banking would continue to be dominated by a few large institutions – mainly universal banks;
• Consolidation would continue internationally;
• Chinese banks would join the top 10 globally;
• New competition would emerge for investment banks – from hedge funds and boutique advisers.

In the UK, new retail banking organisations were seen as likely to emerge, from consolidation of smaller organisations and from the mutual sector. Britain was expected to remain an important centre for asset management, though with no expectations of domestic consolidation. There would, however, be further consolidation in the insurance sector, though it was unlikely to attract foreign investment. With the shift in the global economy to the East, many in the industry saw the priority for investment lying in China and other Asian markets.