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Creating A Financial Services Industry
11/14/2018 at 1:18 AM ET
I spent >20 years in the financial services industry in Asia, in both banking and insurance, and ran distribution & business strategy for 3 global MNC insurers in the last 12 years. Over these years, I’ve had the opportunity to witness and participate in many development phases of the companies that I worked for, whether in investments in new technology or digital, transformation plans, M&A opportunities, building new partnerships or even just improving operational efficiency…
I recently relocated to Perth, Western Australia, a beautiful city where the many side effects of other bigger cities have not yet reached us (bad traffic, high density, homeless issues etc.). We are spoilt for choice when it comes to the great outdoors, the numerous awesome beaches and wonderful amazing people…
Western Australia unfortunately, is like a one trick pony. Blessed with abundant natural resources, the state has benefited greatly from the mining and resources industry, being the state’s biggest employer, and continues to keep the economy going. The challenge in my opinion, is because the state is so dependent on its core economy, any change or movement in global demand, price of commodities etc. creates a ripple effect (both good and bad). I’ve seen the influx of people moving into the state because of jobs, home prices going up, up and up, people starting a bidding war to rent a home, purchases of boats and the list go on. The reverse is also true and isn’t pretty.
While looking at the macroeconomic data for the state and country as well as other economic data with an interest in migration trend, I began to look at what and how the financial institutions did / offered as the demographics began to change. I was surprised that other than the real estate industry (selling homes), nothing much was being done to cater to this new migrant segment. Now I’m not for a country to change to accommodate its new migrants / population, rather I strongly believe that people should integrate into the country that they choose to live in. However, I believe it’s different for organisations. And more so for financial institutions especially when it means helping people manage and grow their wealth.
While the existing financial system seems to be doing fine, I believe there are opportunities that are currently not being fully exploited. Majority of the financial institutions (banks, insurers, investment houses) operate in the Eastern States (New South Wales – Sydney and Victoria – Melbourne). Most local / regional financial institutions had merged or were subject to take overs by bigger organisations over the years resulting in the concentration in the above cities.
Western Australia is located strategically and is often referred to as the bridge to Asia. It also shares the same time zone with some of its neighbours (Singapore, Malaysia) while the other states are a few hours off. As it’s hugely a mining state, it does a lot of trade with countries like China. Some of the banks (headquartered in Sydney or Melbourne) have set up dedicated ‘Asian desks’ here where these ‘Asian desks’ serve and manage business and clients from Asia.
I believe the time is right for Western Australia to establish its own financial services industry, not competing directly with what’s already present in Sydney or Melbourne but to welcome new players into this part of the world, forming part of the state’s business ecosystem, firstly to support and complement the core trade and business activities but more importantly, as a diversification to the state’s economy and jobs. Higher paying jobs and more senior roles that only exist in the headquarters of a corporation, not branch representatives whose jobs can be replaced by an outsourced party or corporate decisions to downsize, rightsize or relocate.
What I’d like to know is whether there are other similar examples (hopefully success stories) in other countries / areas, or if it’s also happened in a different industry. Of course, I’d be very keen to know some thoughts on this.
My apologies for the length of my question/description. I also wasn’t sure where to post this to, hence it appearing here.
Thanks a lot for your time and responses.
11/14/2018 at 9:09 AM
Silicon Valley in the US is one example of an industry co-locating with its required infrastructure and finally reaching critical mass that its sort of business can't economically done anywhere else in the country. These days, with electronic data transmission, the business almost must involve the physical transfer of something among the business "ecosystem"—no matter how small that something is—in order to force co-location.
11/15/2018 at 6:38 PM
Thanks Mike. You reckon Austin shares a similar story as well?
11/16/2018 at 8:12 AM
I think Austin is more of a "Swiss Army knife" for business. They have a generally good climate for just about everything, but don't specialize in any particular sector. They've set up a low cost system that brings in good growth both in population and business. They do seem to work at that more than most metro areas. So...Start with a decent quality infrastructure, make things easy to do, market the heck out of it, and reinvest into it to build it up better. That's the story of most successes. One seldom hears about the failures, though, where some of those points didn't work quite right. Sometimes it's timing.
11/22/2018 at 6:56 AM
Thanks Mike. Just wondering if anyone else has other thoughts before I close the question.
11/22/2018 at 9:22 AM
There are a wealth of studies on the topic, including:
12/5/2018 at 5:46 PM
I am closing this question since there hasn't been much recent activity.
Thanks for participating!
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