Dear reader,
We are proud to announce the tenth edition of our Financial Services Dialogue. The financial services industry is going through major challenges. From a strategic point of view the critical nature of these challenges is probably unprecedented in terms of amplitude of change as well as degree of urgency. We therefore hope that the contributions made by market practitioners and academics continue to provide to you as a reader not only with interesting insights in product and service innovation, but also conceptual frameworks to better understand strategic choices that need to be made. The articles in this 10th edition of the Financial Services Dialogue focus to a large extent on opportunities for financial institutions across industries. This is becoming very relevant given the industry convergence thanks to new technologies and broadening consumer demands. 
In the first article “Why banks are well positioned to aggregate their ecosystem”, Associate Professor Fredrik Hacklin discusses industry convergence and the opportunity for financial institutions to go beyond offering new or better services and venture into a whole new territory where previously unrelated companies start to compete. Fredrik particularly takes up the point that banks and insurance companies should also look at becoming ecosystem aggregators. By leveraging existing assets and capabilities they can thus offer platforms for innovation beyond their existing products and services.
As discussed in the article on industry convergence, it is clear that cross-industry innovation will be key for banks and insurance companies. It is therefore interesting to learn how business schools can contribute through research to developing tools for business model design in a rapidly changing environment. Dr Bart Devoldere from Vlerick Business School has developed a tool to help you get organised for cross-industry innovation by focusing on the most valuable steps to get going and manage the risks.
In the Smart City Ecosystems video, Vlerick researchers Joachim Van den Bergh and Lieselot Danneels talk about the smart city concept and how it relates to cross-industry ecosystems and the opportunities for financial institutions.
The last two articles give examples of how technology can foster new developments leading to opening up new markets. Technology is already in many domains an important driver for innovation, but more interestingly it can also be used as an important catalyst to fundamentally change the traditional way of business modelling as demonstrated in the case of “Beam Dental”. Alex Frommeyer shows how Beam Dental and the use of technology can incentivise people to care more about health such as brushing their teeth more often and as a result benefit from lower Insurance premiums. You may think that such a business model will threaten the profitability of the company but on the contrary - it helps to open up new markets.
The article “The Ergo Proposal” with the testimony of Sgouris Sgouridis shows that innovation can also be aligned with more macro-economic objectives in domains such as more efficient energy use and development of renewable energy.
In Europe, the low interest rate environment, regulatory constraints and fiscal measures taken for example in Belgium on the back of the financial crisis are currently driving dramatic restructuring. Not only in terms of reduced headcount and facilities infrastructure but also encouragingly to help leveraging centres of competences to get better positioned and equipped for the upcoming world of digitisation and innovation.
The risk nevertheless remains that this restructuring is still too strongly a reaction to the current environment. To develop a sustainable new business model and to survive the challenges including industry convergence and disruptive players, restructuring is a beginning but the more difficult part is still to begin. Financial institutions need to look beyond their industry, go outside their comfort zone, assess honestly the strategic assets they can leverage in an increasingly converging world, make the necessary strategic choices and make sure they have the skills and competences to execute.
For financial institutions to succeed nevertheless it will - beyond the above - also be important to have an effective dialogue and cooperation across all stakeholders including financial institutions, regulators and authorities. So far, the environment has seen more pointing the finger and blaming rather than effective collaboration. In Belgium, an encouraging initiative has recently been set up to create a platform for dialogue and sector recommendations.  It is key that such dialogue works and helps all stakeholders to get in the same direction with actions that help create and improve a supportive environment for the changes to come. History does not exactly boost confidence but we should keep hoping that all stakeholders realise that the transformation of the financial services industry is critical. Commitment and alignment are crucial, otherwise more jobs will get lost.
We appreciate receiving feedback and views.
Ignace R. Combes, Chairman Vlerick Centre for Financial Services   

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