Vice Chairman of Oliver Wyman on Major Trends Affecting Financial Services
 

The world of financial services is evolving rapidly, so rapidly that in the past five decades, its contribution to total global GDP has risen from a modest 4% in 1950, to 15% in this millennium. This translates into trillions of dollars per fiscal year. With such staggering figures and in the face of globalization, the industry is hard pressed to provide competitive and quality services. Its significant role in facilitating international investments calls for adaptations to the evolution, to fully exploit the industry’s potential.

These are some of the issues that emerged out of the presentation given by Mr. Charles Bralver, Vice Chairman of Mercer Oliver Wyman during an International Business Relations Program Global Speaker Series event on October 3, 2003. Mr. Bralver, a Fletcher alumnus, spoke to students on ‘The Evolution and Future of the Financial Services Industry.’ Popularly known as ‘Chuck’, Mr. Bravler gave an enlightening glimpse into the growth and developments in this field largely considered exclusive. Financial services, he said, is a 2.2 trillion dollar industry and accounts for 7% of world GDP. It offers consulting services on sectors ranging from insurance, investment banking and banking, to asset management, 70% of which is retail.

A significant development in this industry, Mr. Bralver said, is increasing transfer of financial risk. For instance, states are now transferring risk to individuals as state spending become untenable. Using Germany as an example, he referred to the German Chancellor’s Agenda 2010, which intends to reform the pension sector. It will pass on the responsibility of saving to individuals, which is too costly for the government.

In addition, large corporations are transferring risk to suppliers, resulting in the economic downturn being pushed to other sectors. Mr. Bralver stated that the “cost of loan capital is often not covered leading to capital crises and credit shortages”. This, he added, is the prevailing situation in Germany and Japan. He further stated that as corporations learn to run on a leaner workforce, further risk is transferred to employees through easier and quicker layoffs.

Mr. Bralver concluded with some thoughts on what these changes mean for Fletcher students thinking about entering the financial services sector, noting that an international perspective is increasingly valuable in the industry.

Fletcher students have an advantage over most MBA’s in getting a handle on the complex international dimensions typical of major financial transactions today. The irony of this situation is that the level of quantitative skills needed to enter the industry is higher than in years past, when the industry was less globalized. To complement their global perspective, it’s important that Fletcher students be equipped with skills in areas like statistics, econometrics, and finance.

Charles Bralver is Head of the North America division, Mercer Oliver Wyman. Mercer Inc. and Oliver, Wyman & Company, two leading names in consulting merged on February 24th 2003 to form the present day Mercer, Oliver Wyman. Mr. Bralver has 21 years experience in international financial services, spanning a broad range of issues in the corporate banking, finance and securities sectors in North America, Europe and Asia.
In response to the question “Any thoughts about the new Fletcher logo?”, Mr. Bravler, appearing as one in deep thought, answered, “…the new logo…is the new logo.”