Globalization continues to shape the financial services industry, requiring firms to internationalize their operations and expand their footprints across the world.
In the post-Global Financial Crisis era, most financial services companies took a hard look at their corporate structures and global footprint. More recently, Brexit, and a looming trade war, have financial services firms considering non-traditional site selection locations that could shake up an industry built on the power and prestige of long-standing traditions. Venerated financial hubs such as London, New York City, and Tokyo have storied reputations and street credibility, but they are also incredibly expensive and congested in a world that is becoming increasingly cost-conscious, nimble and decentralized.
Another important element that has accelerated this trend is the development of the fintech industry, which promises to disrupt traditional business models and ways these companies have interacted with their customers thus far. FinTech is poised to revolutionize mainstream banking and consumer engagement through advanced platforms and apps that will streamline mobile payments, peer-to-peer loan transactions, and modernize how people invest in stocks, cryptocurrencies, and conduct other Internet-based financial transactions through their smartphones. This decentralization of the industry presents unprecedented opportunities especially for growth or emerging economies. Determining exactly where, and how, to establish a new presence in different states, countries, or cultures requires a complicated mix of critical factors that could—without notice—devastate not only the expansion venture, but the entire brand and enterprise.
The key to understanding any complex situation is to break it down into its core elements and examine it, from every angle, how those elements are connected and create either success or failure. For financial services firms, effective site selection requires a cohesive team that offers a diverse array of expertise and competencies in everything from real estate and international tax laws to environmental engineering and supply chain logistics. Navigating this level of sophistication requires extraordinary diligence. Below is a list of seven site selection challenges financial services firms must resolve to avoid costly expenses, if not permanent damage to their brands.
In conclusion, financial services firms must remember that each site selection project is a singular endeavor that will require flexibility, foresight, and a willingness to learn. Using the same strategies and asking the same general questions is a recipe for failure. However, implementing an unbiased, dynamic, and comprehensive strategy will identify challenges early on, enable realistic solutions, and optimize the entire process. Situational awareness must be observed at all times, from every member of the team. After all, successful site selections are the ones where people take precedence over the place.