10 years on from the financial crisis our MD Peter Alderson discusses how the financial industry has evolved... for the better.
It’s hard to believe that 2018 marks 10 years since the financial crisis, in what was to be the single most devastating blow to the global economy since the Great Depression of 1929. What is clear however, is how quickly the world has moved on and equally, how far we have come in its wake.
A decade on and it seems like many of the problems that contributed to the crisis have been addressed, although many individuals and businesses are still managing the fallout. As an industry, we must accept that on the subject of risk versus reward, the balance was skewed and it’s vital that lenders don’t make those same mistakes again, especially in light of uncertainties such as Brexit and a growing consumer debt problem in China. The financial services industry needs to remain focused on pricing for risk.
Today the industry has much stricter and more robust policies in place alongside greater regulatory oversight over lending, protecting both lenders and customers. Put simply, the operating models seen pre-crash should struggle to exist anymore. Culturally, there has also been a noticeable shift, people recognise the importance of financial stewardship much more than ever before.
The impact of the crisis was without doubt, a game changer for global financial services, and as challenging as it was, it must also be credited with helping to bring about widescale positive change. One standout is the emergence of the alternative finance market, all but unheard of pre-2007, and offering substantially more choice to customers across both consumer and business finance.
All things considered, the financial sector has rebounded and reinvented itself, demonstrating resilience and innovation. This augurs well for the future wellbeing of our economy.