I recently read a very interesting article here on Consumer trends for 2010 and I thought I would throw a “risk” lense across each of these trends.
- BUSINESS AS UNUSUAL | Forget the recession: the societal changes that will dominate 2010 were set in motion long before we temporarily stared into the abyss. And even when the downturn ends, there won’t be a return to ‘business as usual’.
- The risk lens is a critical lens in this space as it plays right into the regulation that is going to occur through the GFC. Corporate governance has long been in the realm of good risk management but with the GFC there will be an even greater emphasis on this being embedded in business practice and decision making. Risk managers will need to focus on the legislation but continue to focus on engaging in the risk discussion with a view to learning from the past but embracing a “brave new world” where the risk discussion is a forward looking strategic lens.
- URBANY | Extreme urbanization will lead to more sophisticated and demanding consumers around the world. Urban culture is THE culture.
- The more sophisticated, more demanding,
but also more try-out-prone, super-wired urban
consumers are snapping up more ‘daring’ goods, services,
experiences, campaigns and conversations and hence this will push the risk professional into a space of getting in front of the business desire to snap up these opportunities. Innovation needs to be the catch cry of the risk manager just as much as the businesses they support. Things like electronic verification will start to become the accepted norm which will require a complete mind set shift in AML and fraud risks. The past process of waiting to be pushed into a conversation will not hold and it will be critical to be at the forefront of these discussions and to drive the conversation into a logical and positive path.
- The more sophisticated, more demanding,
- REAL-TIME REVIEWS | Whatever new product or service gets launched in 2010, it will be reviewed in real time. Transparency tyranny (or triumph) is upon us.
- The worlds of twitter and facebook have brought the real-time conversation to a new level and a broader audience. Both negative and positive feedback passes across the electronic landscape like a storm passes crosses the countryside. The risk manager needs to work within these mediums and be at the forefront of the conversation around engaging in these mediums. Amazingly the last few years have seen risk almost ignore the need to play in this space but with the transparency of information this must change.
- (F)LUXURY | With status symbols becoming more fragmented, luxury is whatever consumers want it to be in 2010.
- With consumers defining luxury more and more, the consumer will be driving the car of product changes and requirements. This will challenge the risk manager to re-assess some old idioms that perhaps do not stand up to old practices but require more pro-active forward looking risk analysis and planning.
- MASS MINGLING | Online lifestyles are actually fueling real world meet-ups, shattering all predictions about a virtual and socially isolated future
- Surprisingly the physical interaction will advance in human need just as much, if not more, than the electronic (in actual fact we are starting to see the two worlds merge where the electronic joins you in the physical – aka phones that now overlay electronic information on a photo / video you are taking live). This will challenge the risk manager to accept that the consumer may want information pushed to them. This will in particular challenge security settings for financial services.
- ECO-EASY | In 2010, corporations and governments will force consumers to be more green by restricting the alternatives. Say goodbye to consumer choice.
- Clearly the push to more green is going to be driven by both consumer sentiment and regulation. As the risk manager we will play an important role in ensuring the regulation is adequately addressed.
- TRACKING & ALERTING | Tracking and alerting are the new search. Next year, consumers will further expand their sphere of control.
- This goes to a point made earlier where the consumer will want the information pushed to them to track and alert them to things and will therefore have implications for risk on privacy, security and data integrity and quality.
- EMBEDDED GENEROSITY | Generosity as a trend will further adapt to the zeitgeist, leading to more pragmatic and collaborative charity.
- One of the trends that has a lower impact on risk management but still plays a role from two angles. It will impact the corporate world (as it has been for the past few years) and therefore risk will need to consider the reputation risk impacts of how the corporate responds. In addition, the risk profession itself will need to consider this for their employees to ensure adequate time is devoted / given to employees to this area.
- PROFILE MYNING | With hundreds of millions of people now nurturing their online profiles, 2010 will be about consumers making money from these profiles, from intention-based
- This has a huge risk impact, particularly around privacy and data security. Waiting around and watching this trend will be extremely dangerous for the risk manager and therefore a significant amount of time needs to be devoted to thinking through the implications of this type of analysis. In particular, the regulatory environment will have the most challenges in this area.
- MATURIALISM | 2010 will be even more opinionated, outspoken and raw than 2009; thank the anything-goes online world for that. Which brands will be equally daring?
- And lastly this links to other trends detailed above and will be particularly important for the risk manager to consider the innovation in an “anything-goes online universe” and what that means for the risk appetite of the organisation.
This is just the beginning for us all in consider these trends and I have just scratched the proverbial surface of them. I am sure I will be back to discuss each in more detail as time progresses.