Financial Industry Trends and Challenges Shaping the Global Economy

The global financial industry is growing at a rapid rate, expected to surpass USD 28 billion in 2025, growing at a CAGR of 6%.

Numerous financial sectors are expected to see rapid growth over the next five years as the result of emerging trends that will shape the future. As banking and other financial sectors go beyond cash with digital engagement, financial investment activities are getting increasingly digitized with online platforms, self-help portals, aggregators, and algorithm-driven chatbots. Digitization is the future — fueled by the rise of millennials and Gen-Y investors.

In the following article, we will elaborate on some of the major trends and challenges expected to impact various sectors of the financial industry.

What is the financial industry?

Before we dive into the future trends and challenges of finance, it is important to define the industry. BizVibe’s platform contains nearly 200,000 finance companies which are segmented into 10+ categories. Each of these categories belongs to one of four major finance sectors being banking, insurance, investment services, and deposit and non-depository credit intermediation.

Each category is being transformed by its own set of trends and challenges that will greatly influence the direction of the finance companies in the coming years. Below we will discuss the trends and challenges of categories across the major finance sectors.

Depository Credit Intermediation Industry

Emerging Trend – Increasing Adoption of Blockchain Technology

Depository credit intermediaries are increasingly adopting blockchain technology to simplify and expedite loan processing, ensure encryption of every transaction to protect the identity and integrity of all parties involved and many upcoming use cases. The technology is creating a more secure and efficient banking environment for the banks.

Major Challenge – Shortage of Skilled Professionals

There is a shortage of IT professionals who are well-versed in banking nuances, cybersecurity, and the latest technologies, owing to rapid advances in banking technologies across the world, coupled with talent shortage across sectors. This, in turn, is affecting the operations of depository credit intermediaries across the world.

Agencies, Brokerages, and Other Insurance Related Activities Industry

Emerging Trend – Customer-focused Solutions

In its nascent stage, the insurance industry used to provide policies that were more geared towards a one-size-fits-all approach, but that is no longer the case. Customers today are more aware than ever and expect customized solutions for their requirements. As a result, insurers are steadily moving towards tailoring their solutions and policies exactly in line with customer requirements. The industry is experiencing the continuous launch of products targeted to meet very specific customer needs. Some insurers are also providing customers the flexibility to choose between different sections of their policy. These developments on part of insurers are opening up new revenue streams for insurance brokers and giving them flexibility in engaging customers.

Major Challenge – Impact of Covid-19

COVID-19 has significantly impacted the global insurance industry and premium collection. Auto insurance as a category suffered a major setback due to a drop in automobile sales and restrictions on movement. Renewals and fresh policies across most insurance segments experienced a slew of cancellations or postponements due to the paucity of funds in the hands of policyholders. The economic slowdown and muted cashflows also impacted the demand from corporate sectors, especially small and medium scale businesses. Some insurance segments such as auto insurance had to significantly reduce the premium rates due to the crisis.

Insurance Carriers Industry

Emerging Trend – Digital Transformation of Operations

The insurance industry is transforming its operations by enhancing advanced capabilities in artificial intelligence, blockchain, and automation. These technologies are improving productivity and reducing errors as well as cost. Blockchain is improving digital control and automating claim processing while providing a continuous audit trail. Robotic process automation (RPA) technology is simplifying high-volume, non-complex processes involving structured data. AI-based advanced diagnostics are enhancing the assessment of damages and claims as well as automating the renewal and settlement process Major Challenge – Increased Risk of Diseases.

Major Challenge – Increase in Cost of Insurance

An increase in the cost of insurance e.g. health and property insurance, due to factors such as inflation and a hike in operating costs, can lead to more consumers opting out or procuring insurance plans with lesser coverage. This is likely to offset the revenue growth obtained from higher insurance rates.

Financial Industry Companies on BizVibe

BizVibe’s platform contains nearly 200,000 financial company profiles which are free to view. Each profile consists of in-depth company insights, comprising 50+ data points, including full industry trend and challenge analysis for 10+ financial categories.

BizVibe company insights help provide answers to questions such as:

How will industry challenges impact specific geographic regions?

Which regions will emerging trends be the most prominent?

What are a company’s major product and service offerings?

Who are the company’s key executives and what are their roles?

How is a company positioned financially?

Who are the company’s major competitors?

What is the risk level of doing business with a given company?

What is the latest company news?

Additionally, BizVibe enables users to connect with financial companies and includes a feature that allows companies to send and respond to RFI/RFPs directly on the platform. There are financial profiles of companies from over 200 countries on BizVibe. Accessing these profiles to discover, analyze, and connect with financial companies is free to use.

Discover, Analyze, and Compare Finance Companies on BizVibe

Finance Companies in the USA

Company
Finance NAICS
Key Product and Services

Onemain Holdings Inc.

5222

Auto loan, personal finance

Sterling Bancorp

5221

Banking activities, commercial banking

Independent Financial

5221, 5211

Online banking, credit cards, wealth management

Invesco Ltd.

5231

Securities and Commodity Contracts Intermediation and Brokerage

Cigna Holding Company

5241

Insurance Carriers

Genworth Financial Inc.

5241

Insurance Carriers

Mastercard Incorporated

5222

Nondepository Credit Intermediation

Blackrock Inc.

5239

Other Financial Investment Activities

The Western Union Company

5231

Securities and Commodity Contracts Intermediation and Brokerage

American National Insurance Co.

5241

Insurance Carriers

Finance Companies in the UK

Company
Finance NAICS
Key Product and Services

HSBC Holdings plc

5221, 5242, 5231

Commercial banking, insurance, global banking markets

Willis Towers Watson

5242

Brokerage services

International Insurance Co. Of Hannover Se

5242

Specialty insurance

Melrose Industries PLC

5239

Other Financial Investment Activities

Aviva PLC

5241

Insurance carriers

Hso Finance PLC

5222

Nondepository Credit Intermediation

Bank Of Scotland PLC

5221

Depository Credit Intermediation

Royal Bank of Scotland

5221

Depository Credit Intermediation

Georgia Capital PLC

5239

Other Financial Investment Activities

Legal & General Group Plc

5231

Securities and Commodity Contracts Intermediation and Brokerage

Finance Companies in China

Company
Finance NAICS
Key Product and Services

ZheShang Bank Co. Ltd

5221

Depository Credit Intermediation

China International Capital

5231

Securities and Commodity Contracts Intermediation and Brokerage

Bank of Xi’an

5221

Depository Credit Intermediation

Bank Of Shanghai

5221

Depository Credit Intermediation

National Development Bank

5259

Other Investment Pools and Funds

China Construction Bank

5221

Depository Credit Intermediation

Bank of Communications

5221

Depository Credit Intermediation

China Huarong Asset Management Co. Ltd.

5239

Other Financial Investment Activities

Harbin Bank Co. Ltd.

5221

Depository Credit Intermediation

Bank of Beijing

5221

Depository Credit Intermediation

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