ACS Change Acceleration

Banking & Financial Services

Assets of the largest 1,000 banks in the world grew by 6.8% to a record US$96.4 trillion while profits declined by 85% to US$115 billion. Growth in assets in adverse market conditions was largely a result of recapitalization. EU banks holds the largest share of the total, 56%. Asian banks’ share amounts to 14%, while the share of US banks amounts to 13%. Fee revenue generated by global investment banking totals US$66.3 billion. The United States has the most banks in the world in terms of institutions i.e. 7,085 including 82,000 branches. This is an indicator of the geography and regulatory structure of the USA, resulting in a large number of small to medium-sized institutions in its banking system. China’s top 4 banks have in excess of 67,000 branches with an additional 140 smaller banks. Japan has 129 banks and 12,000 branches. Germany, France, and Italy each had more than 30,000 branches – more than double the 15,000 branches in the UK. Financial services are the economic services provided by the finance industry, which encompasses a broad range of organizations that manage money, including credit unions, banks, credit card companies, insurance companies, accountancy companies, consumer finance companies, stock brokerages, investment funds and some government sponsored enterprises. The financial services industry represents 20% of the market capitalization of the S&P 500 in the United States. Finance industry income as a proportion of GDP is 7.5%, and the finance industry’s proportion of all corporate income is 20%. The financial services industry constitutes the largest group of companies in the world in terms of earnings and equity market capitalization. However it is not the largest category in terms of revenue or number of employees. It is also a slow growing and extremely fragmented industry, with the largest company (Citigroup), only having a 3% US market share.

Chicago, IL

Chicago has the third largest gross metropolitan product in the United States. The city has also been rated as having the most balanced economy in the United States, due to its high level of diversification. Chicago is a major world financial center, with the second largest central business district in the United States. The city is the headquarters of the Federal Reserve Bank of Chicago (the Seventh District of the Federal Reserve). The city and its surrounding metropolitan area are home to the second largest labor pool in the United States with approximately 4.25 million workers. In addition, the state of Illinois is home to 66 Fortune 1000 companies, including those in Chicago.

Consultancy

Management consulting, the practice of helping organizations to improve their performance, operates primarily through the analysis of existing organizational problems and the development of plans for improvement. Organizations may draw upon the services of management consultants for a number of reasons, including gaining external (and presumably objective) advice and access to the consultants’ specialized expertise. Consultancies may also provide organizational change-management assistance, development of coaching skills, process analysis, technology implementation, strategy development, or operational improvement services. Management consultants often bring their own proprietary methodologies or frameworks to guide the identification of problems and to serve as the basis for recommendations for more effective or efficient ways of performing work tasks. Management consulting has grown quickly, with growth rates of the industry exceeding 20% during the past 30 years. As a business service, consulting remains highly cyclical and linked to overall economic conditions. Currently, there are three main types of consulting firms. Large, diversified organizations, Medium-sized management consultancies and boutique firms that have focused areas of consulting expertise in specific industries, functional areas, technologies, or regions of the world. The value of the management & marketing consultancy market is calculated as the total revenues received for the provision of corporate strategy services, operations management services, information technology solutions, human resource management services and outsourcing services. The global management & marketing consultancy market has total revenues of $305.0bn, representing a compound annual growth rate (CAGR) of 3%. The operations management segment is the market’s most lucrative, with total revenues of $93bn, equivalent to 30.5% of the market’s overall value. The performance of the market is forecast to accelerate, with an anticipated CAGR of 7% during the next 5 years, which is expected to drive the market to a value of $427.9bn.

Insurance

Global insurance premiums grew by 2.7% in inflation-adjusted terms to $4.3 trillion, climbing above pre-crisis levels. The return to growth and record premiums generated during the year followed two years of decline in real terms. Life insurance premiums increased by 3.2% and non-life premiums by 2.1%. While industrialized countries saw an increase in premiums of around 1.4%, insurance markets in emerging economies saw rapid expansion with 11% growth in premium income. The global insurance industry was sufficiently capitalized to withstand the financial crisis and most insurance companies have restored their capital to pre-crisis levels. With the continuation of the gradual recovery of the global economy, it is likely the insurance industry will continue to see growth in premium income both in industrialized countries and emerging markets. Advanced economies account for the bulk of global insurance. With premium income of $1.62 billion, Europe is the most important region, followed by North America $1.409 billion and Asia $1.161 billion. Europe has however seen a decline in premium income in contrast to the growth seen in North America and Asia. The top four countries generated more than a half of premiums. The United States and Japan alone account for 40% of world insurance, much higher than their 7% share of the global population. Emerging economies account for over 85% of the world’s population but only around 15% of premiums. Their markets are however growing at a quicker pace. The country expected to have the biggest impact on the insurance share distribution across the world is China, which is expected to be the largest insurance market in the next decade or two. The insurance industry comprises establishments that are primarily engaged in the pooling of risk by underwriting insurance (i.e., assuming the risk and assigning premiums) and annuities. The insurance industry is a highly fragmented and includes segments such as life insurance and non-life insurance. The European region currently dominates this industry; however, Latin America, eastern Europe, and the Middle East are expected to lead the industry in the future. Asia is expected to grow the fastest over the next decade.

Montreal

Montreal has the second-largest economy among Canadian cities based on GDP and the largest in Quebec. The city is today an important centre of commerce, finance, industry, technology, culture, world affairs and is the headquarters of the Montreal Exchange. Montreal industries include aerospace, electronic goods, pharmaceuticals, printed goods, software engineering, telecommunications, textile and apparel manufacturing, tobacco, petrochemicals, and transportation. The service sector is also h2 and includes civil, mechanical and process engineering, finance, higher education, and research and development. Montreal ranks as the 4th largest centre in North America in terms of aerospace jobs. The Port of Montreal is the largest inland port in the world handling 26 million tones of cargo annually. As one of the most important ports in Canada, it remains a trans-shipment point for grain, sugar, petroleum products, machinery, and consumer goods. For this reason, Montreal is the railway hub of Canada and has always been an extremely important rail city; it is home to the headquarters of the Canadian National Railway, and was home to the headquarters of the Canadian Pacific Railway.

New York, NY

New York is a global hub of international business and commerce and is one of three “command centers” for the world economy (along with London and Tokyo). The city is a major center for banking and finance, retailing, world trade, transportation, tourism, real estate, new media as well as traditional media, advertising, legal services, accountancy, insurance, theatre, fashion, and the arts in the United States. New York City has been ranked first among 120 cities across the globe in attracting capital, business, and tourists. Many major corporations are headquartered in New York City, including 45 Fortune 500 companies. New York is also unique among American cities for its large number of foreign corporations. One out of ten private sector jobs in the city is with a foreign company.

Technology

Information technology (IT) is the application of computers and telecommunications equipment to store, retrieve, transmit and manipulate data, often in the context of a business or other enterprise. The business value of information technology lies in the automation of business processes, provision of information for decision making, connecting businesses with their customers, and the provision of productivity tools to increase efficiency. The global IT Services industry holds significant opportunities for industry players due to increasing IT spending in the healthcare, retail, and transportation sectors, among others. The market is forecast to reach an estimated US $1,147 billion with a CAGR of more than 5%. The global IT services industry comprises services related to the application of business and technical expertise to enable organizations to create, manage, optimize, and access information and business processes. The industry’s scope includes product support services such as hardware and software maintenance and professional services such as IT consulting, development, and integration services. North America, with 42% of the global market share, dominates the highly fragmented global IT services industry. Outsourcing locations such as India, China, Vietnam, and the Philippines are anticipated to be key drivers because of their low-cost labor and skilled talent pools. The APAC IT services industry is expected to register the highest growth rate among all regions during the forecast period and lead the industry. Government-backed reforms are expected to contribute to significant increases in spending for IT investments. In addition, by generating new opportunities for IT vendors globally, cloud computing is expected to reshape the industry. It is anticipated to offer immense opportunity to penetrate in the small and medium business sector. High volatility in currency exchange rates, a shrinking talent pool, and high labor costs in developed countries are some of the major challenges for the IT services industry. The increasing global demand for systems, software, and services, as well as IT spending by governments, and the banking and financial sectors are likely to boost the IT services market. The industry is highly correlated with economic cycles as IT services are project based and often represent discretionary spending.

Toronto

Toronto is an international centre for business and finance. Generally considered the financial capital of Canada, Toronto has a high concentration of banks and brokerage firms on Bay Street, in the Financial District. The Toronto Stock Exchange is the world’s seventh-largest stock exchange by market capitalization. The five largest financial institutions of Canada, collectively known as the Big Five, have national offices in Toronto. The city is an important centre for the media, publishing, telecommunication, information technology and film production industries; it is home to Bell Media, Rogers Communications, and Torstar. Other prominent Canadian corporations in the Greater Toronto Area include Magna International, Celestica, Manulife Financial, Sun Life Financial, the Hudson’s Bay Company, and major hotel companies and operators, such as Four Seasons Hotels and Fairmont Hotels and Resorts. Although much of the region’s manufacturing activities take place outside the city limits, Toronto continues to be a wholesale and distribution point for the industrial sector. The city’s strategic position along the Quebec City – Windsor Corridor and its road and rail connections help support the nearby production of motor vehicles, iron, steel, food, machinery, chemicals and paper. The completion of the Saint Lawrence Seaway gave ships access to the Great Lakes from the Atlantic Ocean.

Zürich, Switzerland

Zürich is a leading financial center and global city. The Greater Zürich Area is Switzerland’s economic centre and home to a vast number of international companies. By far the most important sector in the economy of Zürich is the service industry, which employs nearly four-fifths of workers. Other important industries include light industry, machine and textile industries and tourism. Most Swiss banks have their headquarters in Zürich and there are numerous foreign banks in the Greater Zürich Area. Located in Zürich, the Swiss Stock Exchange was established in 1877 and is nowadays the fourth most prominent stock exchange in the world. In addition Zürich is the world’s largest gold trading centre. Ten of the country’s 50 largest companies have their head offices in Zürich, among them ABB, UBS, Credit Suisse, Swiss Re and Zürich Financial Services. The high quality of life has been cited as a reason for economic growth in Zürich. The consulting firm Mercer has for many years ranked Zürich as a city with the highest quality of life in the world. In particular, Zürich received high scores for work, housing, leisure, education and safety. Local planning authorities ensure clear separation between urban and recreational areas and there are many protected nature reserves. Other cities in the country, Bern and Geneva, were also listed among the top ten. Zurich LakeZürich is also ranked the sixth most expensive city in the world. The city ranked behind Hong Kong and ahead of Copenhagen. It is the third most expensive city in Europe and second most expensive city in Switzerland after Geneva.

Zürich benefits from the high level of investment in education that is typical of Switzerland in general and provides skilled labour at all levels. The city is home to two major universities, thus enabling access to graduates and high technology research. Professional training incorporates a mix of practical work experience and academic study while, in general, emphasis is placed on obtaining a good level of general education and language ability. As a result the city is home to many multilingual people and employees generally demonstrate a high degree of motivation and a low level of absenteeism. Such characteristics are reflected in the high level of productivity the region enjoys and account for the opening of offices and research centres in the city by large corporations.