BY MCKINSEY AND COMPANY = Bots, algorithms, and the future of the finance function! Automation and artificial intelligence are poised to reshape the finance function. Knowing what to automate and managing the disruption can lead to a new era of productivity and performance. For years, a global pharmaceutical company had outsourced its procure-to-pay finance activities, such as processing invoices and paying suppliers. Savings from low-cost labor and improved processes had yielded savings, but managers were eager to explore whether automation could unlock new opportunities. After assessing for themselves how much work could be automatable, estimating the value at stake, and calculating the investment required, they challenged the company’s offshore business-process outsourcer (BPO) to show that it could compete with an automated model. In the end, the pharmaco managers decided not to bring the outsourced elements home to automate. But they did renegotiate the company’s BPO contract, saving 40 percent or more over the next three years. Offshoring, outsourcing, and centralization have been the bread and butter of improving the finance function’s productivity for decades. As the pharmaco’s experience shows, tech-savvy CFOs are now considering automation to propel a new wave of efficiency and performance. By our assessment, the economics of automating many finance activities are already compelling—a resounding success in some areas, even if performance is mixed in others. Today’s cheaper, better, and faster technology seems destined to reshape the finance function—and without the multi-year headaches that many CFOs associate with early enterprise-resource-planning installations. As in other business settings where automation has become increasingly viable, its implications in finance look to be disruptive for companies and outsourcers alike. The trend raises issues that executives must consider as they adopt a more automated finance operating model, whether internally or through outsourcing. For starters, automating the finance function may be enticing conceptually, but benefits can be elusive. CFOs will need a clearer understanding of what kinds of activities can be automated. To take full advantage of the opportunity, they’ll also need to rethink processes and organizations around the technology in a fundamental way. And they will need to manage the disruption to get through the effort without breaking an already stretched function. Understand what can be automated: #algorithms #economics #tech #business #technology #productivity #work #opportunity #success #experience #finance #pharmaceutical #opportunities #future #automation #artificialintelligence #investment #offshore #planning ...... https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/bots-algorithms-and-the-future-of-the-finance-function
BY MCKINSEY AND COMPANY = Advanced analytics: Nine insights from the C-suite! Conversations with hundreds of business leaders reveal nine ways that they are—and are not—adapting to the analytics revolution. Data and advanced analytics have arrived. The volume of available data is growing exponentially, with more added every day from billions of phones, sensors, payment systems, and cameras. Machine learning is becoming ubiquitous, but organizations are struggling to turn data into value. The stakes are high. Those who advance furthest, fastest will have a significant competitive advantage; those who fall behind risk becoming irrelevant. Analytics cannot be the sole province of the chief information officer (CIO), as is sometimes the case. The CIO may not understand the business as a whole well enough to spot opportunities and threats, or be influential enough to ensure that the company addresses them appropriately. While the expertise the CIO brings is of course essential, business-unit leaders and CEOs must be in charge of analytics to accelerate the pace of change and to ensure intelligent investment. This is beginning to happen: McKinsey has found that more than 50 percent of CEOs consider themselves the primary leader of the analytics agenda, and that figure has been growing steadily. With this in mind, we spoke to more than 300 top executives of major companies. Here we offer nine insights based on these conversations, and suggest actions for business leaders to take. Analytics can create new opportunities and disrupt entire industries. But few leaders can say how: “Where do we want to be in five years as a result of advanced analytics? What are the implications to our business model, culture, portfolio mix, and value proposition?” CEOs all over the world are asking these questions—for good reason. Analytics has the potential to upend the prevailing business models in many industries, and CEOs are struggling to understand how. The need is urgent. #business #businessmodels #opportunities #data #investment #investment #culture #machinelearning #leaders #change #analytics #leader ...... https://www.mckinsey.com/capabilities/quantumblack/our-insights/advanced-analytics-nine-insights-from-the-c-suite
BY MCKINSEY AND COMPANY = The age of analytics: Competing in a data-driven world! Big data’s potential just keeps growing. Taking full advantage means companies must incorporate analytics into their strategic vision and use it to make better, faster decisions. Is big data all hype? To the contrary: earlier research may have given only a partial view of the ultimate impact. A new report from the McKinsey Global Institute (MGI), The age of analytics: Competing in a data-driven world, suggests that the range of applications and opportunities has grown and will continue to expand. Given rapid technological advances, the question for companies now is how to integrate new capabilities into their operations and strategies—and position themselves in a world where analytics can upend entire industries. Is big data all hype? To the contrary: earlier research may have given only a partial view of the ultimate impact. A new report from the McKinsey Global Institute (MGI), The age of analytics: Competing in a data-driven world, suggests that the range of applications and opportunities has grown and will continue to expand. Given rapid technological advances, the question for companies now is how to integrate new capabilities into their operations and strategies—and position themselves in a world where analytics can upend entire industries. Earlier, we estimated the potential for big data and analytics to create value in five specific domains. Revisiting them today shows uneven progress and a great deal of that value still on the table (exhibit). The greatest advances have occurred in location-based services and in US retail, both areas with competitors that are digital natives. In contrast, manufacturing, the EU public sector, and healthcare have captured less than 30 percent of the potential value we highlighted five years ago. And new opportunities have arisen since 2011, further widening the gap between the leaders and laggards. #data #digital #healthcare #opportunities #opportunities #research #manufacturing #retail #leaders #analytics #analytics #bigdata ..... https://www.mckinsey.com/capabilities/quantumblack/our-insights/the-age-of-analytics-competing-in-a-data-driven-world
BY MCKINSEY AND COMPANY = Digital globalization: The new era of global flows! Soaring flows of data and information now generate more economic value than the global goods trade. Conventional wisdom says that globalization has stalled. But although the global goods trade has flattened and cross-border capital flows have declined sharply since 2008, globalization is not heading into reverse. Rather, it is entering a new phase defined by soaring flows of data and information. Remarkably, digital flows—which were practically nonexistent just 15 years ago—now exert a larger impact on GDP growth than the centuries-old trade in goods, according to a new McKinsey Global Institute (MGI) report, Digital globalization: The new era of global flows. And although this shift makes it possible for companies to reach international markets with less capital-intensive business models, it poses new risks and policy challenges as well. The world is more connected than ever, but the nature of its connections has changed in a fundamental way. The amount of cross-border bandwidth that is used has grown 45 times larger since 2005. It is projected to increase by an additional nine times over the next five years as flows of information, searches, communication, video, transactions, and intracompany traffic continue to surge. In addition to transmitting valuable streams of information and ideas in their own right, data flows enable the movement of goods, services, finance, and people. Virtually every type of cross-border transaction now has a digital component. #globalization #businessmodels #markets #data #digital #growth #people #finance #connections #communication #video ....... https://www.mckinsey.com/capabilities/mckinsey-digital/our-insights/digital-globalization-the-new-era-of-global-flows
BY MCKINSEY AND COMPANY = Seven technologies shaping the future of fintech! In the next 10 years, seven key technologies will drive business model reinventions while shaping the competitive landscape of the financial industry. Technological progress and innovation are the linchpins of fintech development, and will continue to drive disruptive business models in financial services. According to McKinsey analysis, seven key technologies will drive fintech development and shape the competitive landscape of finance over the next decade: #computing #technology #bankingindustry #financeandeconomy #financialinstitutions #financialmodeling #financialservices #finance #fintech #digitization #business #businessmodels #innovation #development #future ...... https://www.mckinsey.com/cn/our-insights/our-insights/seven-technologies-shaping-the-future-of-fintech
BY MCKINSEY AND COMPANY = Inspiring individuals is the new competitive advantage. Building a true competitive advantage requires applying that same lens at the individual level to better inspire and enable people on the ground. We’ve long known that the key to unlocking sustainable performance is not just to focus on results. Rather, lasting impact occurs when companies apply equal rigor and resources both to how they make money and how they run the place – something we refer to as performance and health. Companies with this dual focus outperform their peers on almost every financial indicator we’ve seen. However, given the challenges posed by today’s environment, we’re finding that value creation and value capture are happening disproportionately at the edges of an organization. Take, for example, a biopharma company whose primary competitive advantage lies within its R&D team’s ability to innovate faster than others, or an insurance company whose salespeople have built a loyal and robust client base. In these cases, it is the people on the frontlines who are creating significant value. While performance and health at the organization level continues to remain core to creating lasting results, building a true competitive advantage requires applying that same lens at the individual level to better inspire and enable people on the ground. For leaders, this means doubling down on four areas: #team #insurance #people #health #money #environment #leaders #sustainable #building #biopharma ...... https://www.mckinsey.com/capabilities/people-and-organizational-performance/our-insights/the-organization-blog/inspiring-individuals-is-the-new-competitive-advantage
BY MCKINSEY AND COMPANY = Charting the path to the next normal! Crazy for crypto but allergic to risk? For the risk-averse, stablecoins—multiple private, stabilized cryptocurrencies—are a less volatile form of digital currency. Stablecoins gained steam during the first half of 2021, with nearly $3 trillion traded on exchanges. #currency #digital ........ https://www.mckinsey.com/featured-insights/coronavirus-leading-through-the-crisis/charting-the-path-to-the-next-normal/crazy-for-crypto-but-allergic-to-
BY MCKINSEY AND COMPANY = The future of insurance is here! September 18, 2022On September 20-22, thousands of insurance carrier executives, insurtech leaders, and private-equity partners will convene in Las Vegas for InsureTech Connect to address topics including innovation, productivity, sustainability, and the future of the industry. Check out these insights on the most important trends in insurance, learn more about McKinsey’s partnership with #ITC2022, and register for the event to connect with your peers in the industry. The McKinsey line-up at #ITC2022 includes: Broadening the industry’s relevance in turbulent times, hosted by senior partner Kia Javanmardian. Ask me anything: Shaping the industry’s response to climate change with data and analytics, From living longer to living better: Tracking devices to predictive analytics, featuring partner Nick Milinkovich. Touchless claims processing: Why insurers should embrace this, featuring partner Elixabete LarreaWe also will have short presentations at our booth about digital trust, AI in insurance, data science and customer impact, climate opportunity in insurance, and more. Please find the official schedule at ht tps : // mck . co / McKinseyatITC. Climate and insurance: How carriers are preparing for a net-zero future . . #insurance #productivity #insurtech #predictiveanalytics #predictiveanalytics #innovation #analytics #datascience #opportunity #sustainability #digital #data #event #ai #future #climatechange #leaders #leaders ..... https://www.mckinsey.com/featured-insights/themes/the-future-of-insurance-is-here
BY MCKINSEY AND COMPANY = Claims 2030: Embracing the future! As technological change accelerates and customer preferences diverge, the future of claims organizations centers on four key trends. The COVID-19 pandemic has spurred innovation and accelerated the pace of technology adoption across industries. It has also expanded our idea of what’s possible, says McKinsey partner Elixabete Larrea—and insurance is no exception. What can claims organizations do to effectively meet diverging customer preferences in the face of constant change? In these videos, Larrea and McKinsey partner Kristen Ganjani preview the trends that will shape the future of the insurance industry and discuss what organizations need to know to position themselves to thrive. Claims 2030: Dream or reality? Consumer expectations are expanding to include everything from on-demand service and a seamless omnichannel experience to transparency and predictability. For the insurance industry, these evolving demands present both challenges and opport unities. Four trends that will shape the insurance industry. #technology #innovation #insurance #experience #insuranceindustry #insuranceindustry #covid #change #future #change ..... https://www.mckinsey.com/industries/financial-services/our-insights/claims-2030-embracing-the-future
BY MCKINSEY AND COMPANY = As per the McKinsey Global Institute. 2021 turning point: Reinvention and opportunity in the economy of the future! The pandemic has reset the ways we live, work, and do business, accelerating some long-term shifts and setting new changes in motion. In 2021, the McKinsey Global Institute took stock of how the economy is transforming—and the new opportunities now at hand. Below we showcase 12 of the most thought-provoking charts from our research over the past year. It’s a small sample of the rich insights we’ve found as we consider how the world has changed and the postpandemic economy comes into focus. In 2022, the McKinsey Global Institute will publish research on the economic shifts needed to achieve net-zero emissions, shifting regional growth patterns, and human capital, as well as new research on sustainable, inclusive growth. Interactive sources: 1. Business shifts made during the pandemic could yield greater productivity. 2. COVID-19 has altered consumer preferences. 3. Asia’s consumption is rising—and growing more complex. 4. Prioritizing health can deliver economic benefits. 5. The world is wealthier than ever—but much of that wealth is stored in bricks and mortar. 6. The contribution of business activity to GDP per capita has tripled since 1960. 7. Intangibles drive productivity and growth. 8. Sustainable, inclusive growth can deliver big benefits for the environment, society, and the global economy. 9. COVID-19 imposed major changes in the workplace. 10. Rejuvenating traditional sectors can be an engine of growth. 11. China’s evolving economy requires a different mix of workforce skills. 12. Inclusion matters! #humancapital #china #business #productivity #productivity #productivity #work #opportunity #growth #health #work #opportunity #growth #health #future #opportunities #research #environment #research #inclusion #economy #sustainable #economy #inclusion #sustainable #inclusion #economy #covid #society #inclusion #economy #society ...... https://www.mckinsey.com/mgi/overview/2021-turning-point-reinvention-and-opportunity-in-the-economy-of-the-future
BY MCKINSEY AND COMPANY = Meeting the future: Dynamic risk management for uncertain times. The world is changing in fundamental ways, leading to dramatic shifts in the landscape of risks faced by businesses. Beyond the profound health and economic uncertainty of our current moment, catastrophic events are expected to occur more frequently in the future. The digital revolution, climate change, stakeholder expectations, and geopolitical risk will play major roles. The digital revolution has increased the availability of data, degree of connectivity, and speed at which decisions are made. Those changes offer transformational promise but also come with the potential for large-scale failure and security breaches, together with a rapid cascading of consequences. At the same time, fueled by digital connectivity and social media, reputational damage can spark and spread quickly. The changing climate presents massive structural shifts to companies’ risk-return profiles, which will accelerate in a nonlinear fashion. Companies need to navigate concerns for their immediate bottom lines along with pressures from governments, investors, and society at large. All that, and natural disasters, too, are growing more frequent and severe. takeholder expectations for corporate behavior are higher than ever. Firms are expected to act lawfully but also with a sense of social responsibility. Consumers expect companies to take a stand on social issues, such as those fueling the #MeToo and Black Lives Matter movements. Employees are increasingly vocal about company policies and actions. Regulator and government attention is reflecting societal concerns in areas ranging from data privacy to climate. An uncertain geopolitical future provides the backdrop for such pressures. The world is more interconnected than ever before, from supply chains to travel to the flow of information. But those ties are under threat, and most companies have not designed robust roles within the global system that would allow them to keep functioning smoothly if connections were abruptly cut. Companies require dynamic and flexible risk management to navigate an unpredictable future in which change comes quickly. The level of risk-management maturity varies across industries and across companies. In general, banks have the most mature approach, followed by companies in industries in which safety is paramount, including oil and gas, advanced manufacturing, and pharmaceuticals. However, we believe that nearly all organizations need to refresh and strengthen their approach to risk management ..... #supplychains #events #change #safety #riskmanagement #data #digital #management #socialmedia #health #security #future #manufacturing #travel #connections #climatechange #oilandgas #fashion #society #banks #pharmaceuticals #privacy #structural ...... https://www.mckinsey.com/capabilities/risk-and-resilience/our-insights/meeting-the-future-dynamic-risk-management-for-uncertain-times
BY MCKINSEY AND COMPANY = The Future of Digital Innovation in China: Megatrends Shaping One of the World’s Fastest Evolving Digital Ecosystems! The paths taken by Chinese companies have relevant implications for other digital and traditional players as they craft their strategies. In a relatively short span of time, China has transitioned from a technological backwater to become one of the world’s largest digital economies. On the back of its base of nearly one billion internet users, China’s ecommerce sales grew to $1.7 trillion in 2020, a number that is equivalent to 30 percent of all retail sales in China. But this is not just a story of size. It is, above all, a story of innovation and disruption. In omnichannel retail, social media, on-demand services, mobility, fintech, healthtech, and other domains, the country is developing many “China-first” innovations. In this report, we take a close look at these innovations, and the forces, trends, and technologies that enable them. We then identify six megatrends that are shaping the future of digital innovation in China. Finally, we pose a series of quick questions that corporate leaders should consider when crafting their digital strategies in China. By asking the right questions, executives can set their priorities and allocate their resources. Here’s a quick snapshot of what’s inside this report: In Chapter 1, we set the context by highlighting four interconnected factors that have created the conditions necessary to give rise to China’s digital ecosystem: A vast digital consumer base, intense pressure to quickly reach scale, a digital ecosystem that fosters innovation, and the shaping role of government. In Chapter 2, we take a quick look at the current state of play in China’s digital economy, breaking down its components and offering insight into the major forces and technological enablers that have brought us to where we are today. We look at eight of these forces: Ecommerce and omnichannel; social commerce; the on-demand economy; shared mobility; distribution; FinTech; EdTech; and HealthTech. In Chapter 3, we explore six megatrends driving digital innovation in China: The great retail integration; The virtualization of services; The mobility revolution; Digitization of social life; Industrial IOT / supply chain digitization; and digital urbanization. Finally, in Chapter 4, we share a checklist of eight questions that CEOs can use to start thinking through their strategies. #future #digitization #digitalstrategy #mobilecommerce #china #china #innovation #sales #digital #socialmedia #socialcommerce #ecommerce #share #socialcommerce #supplychain #fintech #retail #leaders #iot #economy #edtech #urbanization #virtualization ..... https://www.mckinsey.com/featured-insights/china/the-future-of-digital-innovation-in-china-megatrends-shaping-one-of-the-worlds-fastest-evolving-digital-ecosystems
BY MCKINSEY AND COMPANY = The Future of Digital Innovation in China: Megatrends Shaping One of the World’s Fastest Evolving Digital Ecosystems! The paths taken by Chinese companies have relevant implications for other digital and traditional players as they craft their strategies. In a relatively short span of time, China has transitioned from a technological backwater to become one of the world’s largest digital economies. On the back of its base of nearly one billion internet users, China’s ecommerce sales grew to $1.7 trillion in 2020, a number that is equivalent to 30 percent of all retail sales in China. But this is not just a story of size. It is, above all, a story of innovation and disruption. In omnichannel retail, social media, on-demand services, mobility, fintech, healthtech, and other domains, the country is developing many “China-first” innovations. In this report, we take a close look at these innovations, and the forces, trends, and technologies that enable them. We then identify six megatrends that are shaping the future of digital innovation in China. Finally, we pose a series of quick questions that corporate leaders should consider when crafting their digital strategies in China. By asking the right questions, executives can set their priorities and allocate their resources. Here’s a quick snapshot of what’s inside this report: In Chapter 1, we set the context by highlighting four interconnected factors that have created the conditions necessary to give rise to China’s digital ecosystem: A vast digital consumer base, intense pressure to quickly reach scale, a digital ecosystem that fosters innovation, and the shaping role of government. In Chapter 2, we take a quick look at the current state of play in China’s digital economy, breaking down its components and offering insight into the major forces and technological enablers that have brought us to where we are today. We look at eight of these forces: Ecommerce and omnichannel; social commerce; the on-demand economy; shared mobility; distribution; FinTech; EdTech; and HealthTech. In Chapter 3, we explore six megatrends driving digital innovation in China: The great retail integration; The virtualization of services; The mobility revolution; Digitization of social life; Industrial IOT / supply chain digitization; and digital urbanization. Finally, in Chapter 4, we share a checklist of eight questions that CEOs can use to start thinking through their strategies. ..... https://www.mckinsey.com/featured-insights/china/the-future-of-digital-innovation-in-china-megatrends-shaping-one-of-the-worlds-fastest-evolving-digital-ecosystems #future #digitization #digitalstrategy #mobilecommerce #china #innovation #digital #socialmedia #ecommerce #sales #supplychain #fintech #retail #share #socialcommerce #leaders #iot #edtech #urbanization #economy #virtualization ...... https://www.mckinsey.com/capabilities/growth-marketing-and-sales/our-insights/whats-next-in-ecommerce
BY MCKINSEY AND COMPANY = Open-source e-commerce: The next wave of value for the enterprise! Moving to open-source e-commerce has significant benefits, but companies must be willing to embrace a broader digital culture. Customers of a large advanced-electronics manufacturing business were having trouble finding and ordering products on the company’s website. The solution? Customer service told them to email their orders to their sales reps, who would then enter them into the site themselves. The email orders were inevitably unclear, leading sales reps to spend endless hours searching for products, clarifying the orders, and inputting the wrong information. Not only that, but top sales reps were spending their time doing basic fulfillment, not selling. The manufacturer knew this wasn’t sustainable, so it decided to upgrade its e-commerce portal. A systems integrator (SI) vendor recommended a packaged solution that would take two years to build, with a minimum viable product (MVP) of the front-end portal available in eight to ten months. That was just too long. So executives turned to open source for the front end of the company’s e-commerce solution. They established a team of ten people, including five developers, who were dedicated to the project and worked in agile ways, using open source to develop a product inventory, integrations into the enterprise resource planning (ERP) system, digital-marketing integrations, and product pages with full ordering capabilities. In about eight weeks, they launched the MVP e-commerce site with page load times of 1.5 seconds—more than five times faster than the company’s existing version. The frustrations of working with complex legacy architecture is hardly an anomaly in the corporate world, but turning to open source as a solution for e-commerce is. Many large companies have been using open source for years now, though often in isolated areas deeper in the stack. But open-source software (OSS) has evolved to the point where it can provide a broad range of benefits in e-commerce, such as speed, low total cost of ownership, flexibility, and access to talent, to name a few. While cost savings are an important benefit, the real value of using open source is in acquiring key talent, helping build up an open architecture, and accelerating the culture of speed and flexibility that’s needed to be competitive in a digital world. Being serious about being digital means being serious about open source. owever, to borrow a well-worn phrase, “With great power comes great responsibility,” going the OSS route requires a greater commitment and more ..... #electronics #software #business #marketing #agile #team #sales #digital #people #architecture #project #culture #manufacturing #sustainable #talent #customerservice #power #email #frontend #planning #commerce #opensource ..... https://www.mckinsey.com/capabilities/mckinsey-digital/our-insights/open-source-e-commerce-the-next-wave-of-value-for-the-enterprise
BY MCKINSEY AND COMPANY = The next normal in construction! How disruption is reshaping the world’s largest ecosystem! Construction, which encompasses real estate, infrastructure, and industrial structures, is the largest industry in the global economy, accounting for 13 percent of the world’s GDP. A closer look at its underlying performance highlights the industry’s challenges in good economic times, let alone in times of crisis. We expect a set of nine shifts to radically change the way construction is done. Companies that can adjust their business models stand to benefit handsomely, while others may struggle to survive. Historically, the construction industry has underperformed. Construction is responsible for a wide range of impressive accomplishments, from stunning cityscapes and foundational infrastructure on a massive scale to sustained innovation. However, in the past couple of decades, it also has been plagued by dismal performance. Annual productivity growth over the past 20 years was only a third of total economy averages. Risk aversion and fragmentation as well as difficulties in attracting digital talent slow down innovation. Digitalization is lower than in nearly any other industry. Profitability is low, at around 5 percent EBIT margin, despite high risks and many insolvencies. Customer satisfaction is hampered by regular time and budget overruns and lengthy claims procedures. #businessmodels #realestate #productivity #innovation #digital #growth #change #accounting #construction #economy #talent #infrastructure #constructionindustry ....... https://www.mckinsey.com/~/media/mckinsey/industries/capital%20projects%20and%20infrastructure/our%20insights/the%20next%20normal%20in%20construction/executive-summary_the-next-normal-in-construction.pdf
The world of work is changing. Artificial intelligence and automation will make this shift as significant as the mechanization in prior generations of agriculture and manufacturing. While some jobs will be lost, and many others created, almost all will change. The COVID-19 crisis accelerated existing trends and caused organizations to reevaluate many aspects of work. This regularly updated collection of articles draws together our latest perspectives on the future of work, workforce, and workplace. Bridging the advancement gap: What frontline employees want—and what employers think they want! Improving opportunities for low-wage hourly employees to advance their careers can raise US workforce skill levels and give a powerful boost to inclusion. How to lead in a hybrid environment. Work has changed—and so must leaders. These four management shifts are making the biggest impact in today’s hybrid work environment.
BY MCKINSEY AND COMPANY = The future of risk management in the digital era! We collaborated with the Institute of International Finance (IIF) and more than 50 institutions around the world, including banks, regulators, and fintechs, to explore critical questions on the future of risk management. This report aims to answer these questions and shares insights to help organizations navigate a digital transformation of the risk function—now and in the long term. The facts about the digital era are becoming familiar but remain astonishing. Computing power has doubled annually since the 1970s,1 and costs have fallen at about the same rate. With every human activity now digitally recorded (even sleep, in Apple’s new health app), more data have been generated over the past two years than in all of previous recorded history. The number of interactive devices is also increasing fast. Four billion smartphones were active in 2016,2 with two billion more to come. And all those smartphones (and laptops, tablets, sensors, cameras, and so on) are busily creating torrents of yet more data—2.5 exabytes every day. Data, analytics, and the digital tools to harness them are transforming all aspects of life, including business and industry.3 Banking is undergoing its own digital revolution (see sidebar “What is digital?”), with significant implications for risk management. In the 2017 IIF/McKinsey digital risk survey,4 we find that 70 percent of banks have digital risk prominently on the radar, with a middling level of management attention, and 10 percent have it on the high-priority list. Correspondingly, respondents indicate that 22 percent of banks—nearly 30 percent in Europe and the rest of world—have invested more than 25 percent of the annual risk budget to digitize risk management. Six main trends are behind this transformation, either directly or because they build a case for change. Front and center are customers and their ever-rising expectations. Today’s consumers and businesses are accustomed to personalization through social media and to rapid fulfillment through e-commerce. They expect the same kind of near-instantaneous service and customized products from their banks. A second force is greater competitive pressure: aggressive fintechs, some prominent nonbank lenders, and early-adopting incumbents have enhanced their customer offerings, largely automated their processes, and made their risk models more precise. As a result, they can undercut traditional banks on price (our research has shown that digital attackers’ cost/income ratio is 33 percent, compared with 55% @ .... #riskmanagement #data #digital #computing #personalization #business #management #health #socialmedia #finance #future #research #help #digitaltransformation #transformation #change #analytics #power #power #europe #banking #commerce #banks #sleep ....... https://www.mckinsey.com/capabilities/risk-and-resilience/our-insights/the-future-of-risk-management-in-the-digital-era
BY THE WORLD BANK = THE CHANGING NATURE OF WORK! The World Development Report (WDR) 2019: The Changing Nature of Work studies how the nature of work is changing as a result of advances in technology today. Fears that robots will take away jobs from people have dominated the discussion over the future of work, but the World Development Report 2019 finds that on balance this appears to be unfounded. Work is constantly reshaped by technological progress. Firms adopt new ways of production, markets expand, and societies evolve. Overall, technology brings opportunity, paving the way to create new jobs, increase productivity, and deliver effective public services. Firms can grow rapidly thanks to digital transformation, expanding their boundaries and reshaping traditional production patterns. The rise of the digital platform firm means that technological effects reach more people faster than ever #humancapital #markets #technology #productivity #productivity #futureofwork #opportunity #robots #work #jobs #digital #people #development #digitaltransformation #bank ..... https://www.worldbank.org/en/publication/wdr2019
BY THE ECONOMIST = Future Risk Management! We’re living in a world of intensifying global risks: extreme weather events, cyber attacks, critical information infrastructure breakdowns, and more. This site presents crucial insights from Global Business Intelligence’s clients on preventing and minimising the impact of these risks on your business. Risk and Reward: From digital disruption to environmental upheaval, the rapidly shifting risk management landscape demands board-level attention. Leaders who embrace the new landscape have much to gain. As digital innovation becomes a top priority across industries, it is also generating a growing list of concerns for risk managers. Uncertainty is a fundamental part of risk management—and more than ever today, when technological advances, coupled with economic, environmental, political and social changes, continue to create new opportunities and challenges for the sector. Once largely associated with insurance, compliance and loss avoidance, risk management is no longer a box-ticking exercise. Ownership is now a C-suite and board-level priority that requires cultivating a strong risk culture and integrating risk management into other business processes. Grow sustainably with effective operational risk management! Mindset Innovation: Improving Risk Measurement and Control! Executable, realistic and sustainable risk appetite! Quantum-Enhanced Cyber Security! Cyber catastrophe in connected economy! #management #riskassessment #riskmanagement #insurance #compliance #business #innovation #cybersecurity #cyber #digital #digital #opportunities #future #culture #sustainable #leaders #mindset #leaders . #events #economy #infrastructure #environmental #businessintelligence ....... https://futureriskmanagement.economist.com
BY THE INTERNATIONAL MONETARY FUND = A Global Strategy to Manage the Long-Term Risks of COVID-19! Summary: The pandemic is not over, and the health and economic losses continue to grow. It is now evident that COVID-19 will be with us for the long term, and there are very different scenarios for how it could evolve, from a mild endemic scenario to a dangerous variant scenario. This realization calls for a new strategy that manages both the uncertainty and the long-term risks of COVID-19. There are four key policy implications of such as strategy. First, we need to achieve equitable access beyond vaccines to encompass a comprehensive toolkit. Second, we must monitor the evolving virus and dynamically upgrade the toolkit. Third, we must transition from the acute response to a sustainable strategy toward COVID-19, balanced and integrated with other health and social priorities. Fourth, we need a unified risk-mitigation approach to future infectious disease threats beyond COVID-19. Infectious diseases with pandemic potential are a threat to global economic and health security. The international community should recognize that its pandemic financing addresses a systemic risk to the global economy, not just the development need of a particular country. Accordingly, it should allocate additional funding to fight pandemics and strengthen health systems both domestically and overseas. This will require about $15 billion in grants this year and $10 billion annually after that. #community #funding #development #future #strategy #sustainable #health #economy #covid #security ..... https://www.imf.org/en/Publications/WP/Issues/2022/04/04/A-Global-Strategy-to-Manage-the-Long-Term-Risks-of-COVID-19-516079
BY THE FINANCIAL TIMES = How company finance chiefs can prepare for the worst. Past crises offer lessons on navigating chaotic times, a professor’s research shows! Please use the sharing tools found via the share button at the top or side of articles. Copying articles to share with others is a breach of FT.com T&Cs and Copyright Policy. Email licensing@ft.com to buy additional rights. Subscribers may share up to 10 or 20 articles per month using the gift article service. More information can be found at [ ....] From the turbulence of Covid lockdowns and the accelerated impact of climate change, to the conflict in Ukraine, chief financial officers have to handle an ever wider range of unforeseen scenarios caused by factors beyond their control. The invasion of Ukraine poses a specific challenge to the global economy that many European countries thought was beyond the realms of possibility in the 21st century — a war on their own doorstep. Beyond the devastation experienced by Ukrainians, this conflict has plunged the world economy into upheaval. This is set against a background of global inflation, which is at its highest levels in 40 years in the UK and US, and an energy system struggling to balance the imperatives of affordability, security and expansion of renewable power to meet climate change ambitions. Yet we can learn lessons about the impact of war from past conflicts. With colleagues from Imperial College London and Stockholm School of Economics, we studied the inventory purchases of 650 companies in Mozambique, a country where political conflicts, instability and crime are regular occurrences and an obstacle to private enterprises. We examined each company’s purchases of items for resale to customers over a 22-month period of violent political conflicts within a 10km radius of their locations. We found that, on average, those in areas with local violent conflict reduced investment in inventory by as much as one-fifth. This effect was even worse for smaller companies, which experienced the greatest damage and cut investments by a third. While some of the small businesses ceased trading, for those remaining active, this problem persisted for almost two months. This shows that regular conflict could put businesses in a constant state of low investment due to increasing uncertainty and lack of demand for products and services. Please use the sharing tools found via the share button at the top or side of articles. Copying articles to share with others is a breach of FT.com T&Cs and Copyright Policy. #economics #finance #energy #investment #research #school #london #power #email #covid #climatechange #trading #investments #economy #share #security ...... https://www.ft.com/content/4255c0f0-c00f-4cf3-b145-16c55e390239
BY MCKINSEY AND COMPANY = Your guide to the metaverse! April 17, 2022. What exactly is the metaverse? What does it look like today? What will it look like ten years from now? All this and more is answered in a series of episodes from the McKinsey’s Technology Council’s new podcast, At the Edge. Listen to all three conversations with accomplished metaverse experts as they explain and explore the good, the bad, and the ugly of this ever-evolving cutting-edge technology—and what it means for your business. What is the metaverse—and what does it mean for business? The promise and the peril of the metaverse. Innovative and practical applications of the metaverse! #business #technology #like #podcast ....... https://www.mckinsey.com/featured-insights/themes/your-guide-to-the-metaverse
BY MCKINSEY AND COMPANY = Cybersecurity in a digital era! Even before the advent of a global pandemic, executive teams faced a challenging and dynamic environment as they sought to protect their institutions from cyberattack, without degrading their ability to innovate and extract value from technology investments. Over the past year, we’ve sought to publish cybersecurity articles in various areas that will help senior executives consider their options and make pragmatic decisions about how to move forward in making the right tradeoffs in managing technology risks. #technology #cybersecurity #digital #help #environment #cyberattack #investments ....... https://www.mckinsey.com/capabilities/risk-and-resilience/our-insights/cybersecurity-in-a-digital-era
BY MCKINSEY AND COMPANY = Social media as a service differentiator: How to win! With customers increasingly moving their service interactions onto social media, companies have an opportunity to leverage these channels to differentiate their service experience. Customer service today is a public affair. Poor service is no longer resolved in private through traditional call centers and email channels but laid bare on social media with far-reaching reputational consequences—and opportunities—for companies. Customers are not coming to social media just in anger or frustration, either. Customer behavior and expectations have been shaped by digital-first, fast-growing tech companies. People increasingly expect rapid responses 24/7, and social media is becoming a preferred channel for customer service interactions—and a challenging one. One survey found that when consumers have a bad experience, half will complain publicly on social media. And if they don’t receive an answer at all, 81 percent won’t recommend that company to their friends. Companies are under greater pressure than ever to be present and responsive on their customers’ preferred social channels. Daunting as this may be, with the right strategy, organizational structure, processes, and empowered resolution teams, companies can use social media to drive positive brand experiences, as many leading companies have been able to do. This article explores the challenges facing organizations as they shift toward using social media as a full-service channel and offers an approach to excel at delivering end-to-end customer service on social channels. Shifting toward a full-service channel: In October 2021, there were 4.6 billion social media users worldwide, with 13 new users signing up to their first social media account every second. Social media is fast becoming a primary channel of communication and social interaction for many. #tech #opportunity #experience #socialmedia #digital #people #opportunities #communication #strategy #brand #customerservice #email ...... https://www.mckinsey.com/capabilities/operations/our-insights/social-media-as-a-service-differentiator-how-to-win
BY MCKINSEY AND COMPANY = The data-driven enterprise of 2025, January 28, 2022! By 2025, smart workflows and seamless interactions among humans and machines will likely be as standard as the corporate balance sheet, and most employees will use data to optimize nearly every aspect of their work. We know 2025 isn’t too far off, but that’s the point. Seven characteristics will define this new data-driven enterprise, and we’ve already seen many companies exhibit at least some of them, with many more beginning the journey to do so. Those able to make the most progress fastest stand to capture the highest value from data-supported capabilities. Companies already seeing 20 percent of their earnings before interest and taxes (EBIT) contributed by artificial intelligence (AI), for example, are far more likely to engage in data practices that underpin these characteristics. This guide is intended to help executives understand the characteristics of the new data-driven enterprise and the capabilities they enable. It also provides resources to dive deeper on how to embed them in your organization. Data embedded in every decision, interaction, and process Today. Organizations often apply data-driven approaches—from predictive systems to AI-driven automation—sporadically throughout the organization, leaving value on the table and creating inefficiencies. Many business problems still get solved through traditional approaches and take months or years to resolve. Characteristic 1: Data embedded in every decision, interaction, and process Today: Organizations often apply data-driven approaches—from predictive systems to AI-driven automation—sporadically throughout the organization, leaving value on the table and creating inefficiencies. Many business problems still get solved through traditional approaches and take months or years to resolve. By 2025: Nearly all employees naturally and regularly leverage data to support their work. Rather than defaulting to solving problems by developing lengthy—sometimes multiyear—road maps, they’re empowered to ask how innovative data techniques could resolve challenges in hours, days or weeks. Organizations are capable of better decision making as well as automating basic day-to-day activities and regularly occurring decisions. Employees are free to focus on more “human” domains, such as innovation, collaboration, and communication. The data-driven culture fosters continuous performance improvement to create truly differentiated customer and employee experiences and enable the growth of sophisticated new applications that aren’t widely available today. #business #innovation #work #data #growth #culture #ai #communication #automation #artificialintelligence #artificialintelligence #collaboration #taxes #help ....... https://www.mckinsey.com/capabilities/quantumblack/our-insights/the-data-driven-enterprise-of-2025
BY MCKINSEY AND COMPANY = Disrupt with game-changing strategies! Robotics & Automation! Robotics and automation are dramatically reshaping the global economy. We’re helping clients use the newest technologies to change the way they work. From delivering faster customer service to better quality products and efficient operations, robotics and automation provide enormous value for organizations that adopt them at scale. Despite this, succeeding in the fast-moving world of automation can be challenging. Some organizations struggle to capture the real value, focusing on many small wins, which don’t deliver the full potential. Others rely on vendors and end up with “tool proliferation” that confuses the workforce and complicates tasks. And many fall into the IT fallacy—that sustainable automation can be driven by IT alone. We help clients capture the opportunity from automation by focusing on five practices we believe are essential for successful automation programs: Set a game changing aspiration: target 30 percent–plus impact, and fundamentally restructure the cost base to make it a competitive advantage. Focus on the people: tackle the social implications head on, and retrain and recruit people that will thrive in an automated world. Engage IT: rethink how IT fundamentally engages with the business to deploy and maintain automation at scale. Build in-house capabilities: build the technical and organizational capabilities needed to make automation stick. Systematically capture value: apply automation within broader end-to-end redesigns to ensure full value capture, and sustain value by building a clear target-operating model and moving toward it systematically. Full intelligent process automation comprises five key technologies. Here’s how to use them to enhance productivity and #business #productivity #work #opportunity #people #automation #help #sustainable #sustainable #building #customerservice #building #change #quality #robotics #economy ..... https://www.mckinsey.com/capabilities/mckinsey-digital/how-we-help-clients/robotics-and-automation
BY MCKINSEY AND COMPANY = The compliance function at an inflection point! McKinsey’s benchmarking survey of leading banks helped identify five steps toward transforming the efficiency and effectiveness of the compliance function. The 2008 financial crisis brought compliance into sharp focus. At financial institutions worldwide, failures related to compliance led to fines and losses topping $300 billion in the ensuing years—damage approaching the proportions of crisis-induced credit losses. Compliance woes have not gone away since: recent McKinsey research indicates that most senior managers feel more comfortable with their credit-risk management than with their control of compliance risk. The reason for the discomfort is the inchoate state of compliance standards. Best practices for compliance risk are still emerging, few agree on the most effective organizational approach, and business ownership of compliance risk is weak. nstitutions have heavily invested in compliance over the past ten years. Costs increased to unsustainable levels, so banks are now seeking to improve the efficiency as well as the effectiveness of their compliance departments. With standards still emerging, however, tracking developments and comparing compliance performance with peers have proved difficult. To address this gap, McKinsey launched a compliance benchmarking effort in 2017, with 22 leading institutions from Asia, Europe, and North America, participating. We have updated this effort for 2018, with 24 leading institutions. Both global systemically important banks (G-SIBs) and non-G-SIBs participated. What follows is a report on our latest findings, along with insights from our discussions with executives at the banks that took part. Our aim is to provide a robust fact base for institutions exploring the potential for enhancing their compliance function. Compliance-spending growth is slowing: In response to regulatory feedback and industry-wide failures, many institutions have expanded the mandate and size of their compliance function over the past decade. However, this growth seems to have peaked. While nearly half our sample of banks saw their costs rise by more than 20 percent during 2014–16, that share fell to one-quarter for the 2015–17 period. Three-quarters of respondents expect compliance costs either to stabilize or fall in the coming year (Exhibit 1). #business #riskmanagement #compliance #growth #share #research #europe #banks ....... https://www.mckinsey.com/capabilities/risk-and-resilience/our-insights/the-compliance-function-at-an-inflection-point
BY MCKINSEY AND COMPANY = Conjuring the future, one industry at a time! The Next Normal. The future of video entertainment: Immersive, gamified, and diverse! You’re at the movies with friends—but the movie is more like a game with a narrative. You feel like you’re in the movie because your seat gets hot when there’s a fire on screen. And everyone can see and hear the movie in whatever language they choose. That scenario could represent the next normal in video entertainment, according to McKinsey experts and industry executives. “There’ll be a blurring of the lines between things we watch and things we play” Hear four of McKinsey’s media and analytics experts describe the coming evolution of filmed entertainment and gaming. Jacomo Corbo, Jonathan Dunn, Tom Svrcek, and Kristi Tausk imagine what video entertainment could be like in 2030. #language #entertainment #video #like #analytics #future #future #gaming #media ........ https://www.mckinsey.com/featured-insights/the-next-normal/video-entertainment
BY MCKINSEY AND COMPANY = The Rise of Quantum Computing! Accelerating technological breakthroughs, increasing investment flows, start-up proliferation, and promises of capable quantum systems by 2030 signal it’s time for business leaders to begin planning their quantum-computing strategies. Quantum computing funding remains strong, but talent gap raises concern! June 15, 2022 – Our latest Quantum Technology Monitor shows industry interest remains strong, China is upping its game, and talent shortages require attention. #computing #technology #quantumcomputing #china #kernel #plugins #kernel #funding #business #investment #leaders #talent #planning ......... https://www.mckinsey.com/featured-insights/the-rise-of-quantum-computing
BY MCKINSEY AND COMPANY = The cloud as a strategic ecosystem for innovation and growth! In this interview, Deutsche Börse’s chief information officer and chief operating officer explains how the company’s ongoing cloud journey is defining its digital transformation. When Deutsche Börse embarked on its cloud journey in 2016, it approached the migration as a way to create growth and business innovation, rather than as merely an IT enhancement. Chief information officer and chief operating officer Christoph Böhm first spoke to McKinsey about that journey in early 2020. In this follow-up interview, Böhm goes into greater detail about various aspects of the company’s ongoing migration, such as how it created a migration pipeline, made organizational changes, and measured success. Speaking with McKinsey’s Harald Kube and James Kaplan, Böhm also explains why migrating to the cloud was the next logical step in enabling innovation and growth. What follows is an edited version of their conversation. Focusing on the buiness benefits of cloud: McKinsey: What was the starting point and core motivation behind your cloud journey? Christoph Böhm: We believe that time to market and scaling technical services are crucial factors for our growth and innovation strategies. Many recent technologies, such as blockchain, big data, machine learning, and artificial intelligence, can only exist in a meaningful way on a public cloud. We realized that a cloud ecosystem offering these services on demand and at scale was strategically important to us and provided far more than efficiency gains through elasticity. To maximize those benefits, we’ve partnered with innovative hyperscaling market leaders that offer a wide range of services in full compliance with local regulations. #business #innovation #success #growth #motivation #compliance #cloud #blockchain #digitaltransformation #digitaltransformation #machinelearning #artificialintelligence #leaders #pipeline #bigdata #interview ....... https://www.mckinsey.com/capabilities/mckinsey-digital/our-insights/the-cloud-as-a-strategic-ecosystem-for-innovation-and-growth
BY MCKINSEY AND COMPANY = Mobilizing your C-suite for big-data analytics! Leadership-capacity constraints are undermining many companies’ efforts. New management structures, roles, and divisions of labor can all be part of the solution. Over the past 30 years, most companies have added new C-level roles in response to changing business environments. The chief financial officer (CFO) role, which didn’t exist at a majority of companies in the mid-1980s, rose to prominence as pressures for value management and more transparent investor relations gained traction.1 Adding a chief marketing officer (CMO) became crucial as new channels and media raised the complexity of brand building and customer engagement. Chief strategy officers (CSOs) joined top teams to help companies address increasingly complex and fast-changing global markets. Today, the power of data and analytics is profoundly altering the business landscape, and once again companies may need more top-management muscle. Capturing data-related opportunities to improve revenues, boost productivity, and, sometimes, create entirely new businesses puts new demands on companies—requiring not only new talent and investments in information infrastructure but also significant changes in mind-sets and frontline training.2 It’s becoming apparent that without extra executive horsepower, stoking the momentum of data analytics will be difficult for many organizations. Because the new horizons available to companies typically span a wide range of functions, including marketing, risk, and operations, the C-suite can evolve in a variety of ways. In some cases, the solution will be to enhance the mandate of the chief information, marketing, strategy, or risk officer. Other companies may need new roles, such as a chief data officer, chief technical officer, or chief analytics officer, to head up centers of analytics excellence. This article seeks to clarify the most important tasks for executives playing those roles and then sets out some critical questions whose answers will inform any reconfiguration of the C-suite. Daunting as it may seem to rethink top-management roles and responsibilities, failing to do so, given the cross-cutting nature of many data-related opportunities, could well mean jeopardizing top- or bottom-line growth and opening the door to new competitors. Six top-team tasks behind data analytics: Crafting and implementing a big-data and advanced-analytics strategy demands much more than serving up data to an external provider to mine for hidden trends. Rather, it’s about ....... #building #infrastructure #investments #complexity #talent #power #media #dataanalytics #engagement #strategy #brand #change #analytics #data #management #growth #opportunities #help #training #business #marketing #leadership #markets #team #productivity #markets ........ https://www.mckinsey.com/capabilities/mckinsey-digital/our-insights/mobilizing-your-c-suite-for-big-data-analytics
