Introducing Financial Infrastructure, Technology & Services (FITS) at Oliver Wyman

Time for FITS to take centre-stage?

Twelve years ago, the most valuable actors in the Financial Services (FS) ecosystem were banks, insurers and asset managers – i.e. balance-sheet led providers. Of the top 50 players active in FS by market cap in 2010, 48 were balance-sheet led. Oliver Wyman’s market-leading Financial Services franchise was built around the core driver of value creation for balance-sheet driven business models – risk, specifically the understanding, measuring and pricing for risk.

Over the past twelve years, a number of well-signaled structural trends have compounded to fundamentally alter the composition of the Financial Services ecosystem. Post-crisis regulation, advances in technology and the rise in private markets activity have resulted in a more prominent, and highly-valued, role for players who provide infrastructure, data, information, software and technology to the FS ecosystem. There are more subtle factors at play here too – the next generation of talent feeling more drawn to smaller, faster growing companies and generational shifts in consumer behaviour.?

The last decade has seen the rapid emergence of Financial Infrastructure, Technology & Services (FITS) providers, transforming the financial services landscape and now capturing 20%+ of FS market value.

The net result is that today we have a Financial Services ecosystem that whilst still centered?on the balance-sheet actors, features a more prominent role for the infrastructure, information and technology players. At the start of 2022, of the top 50 firms (by market cap) centered in FS, 37 are traditional balance-sheet actors and 13 are infrastructure, information or technology providers. Over the past twelve years, the infra, info and tech players have added $3.5 TN (x8) in market cap, in comparison to $7 TN (x2) for the balance sheet players. In addition, there are at least 235 privately owned infra, info, tech players in FS that are unicorns (valued over $1BN). Over this period, Oliver Wyman has played a key role through this transition – serving both public and privately owned providers on their growth journey.

Looking forward, we see this trend continuing – with the growth and value creation in the FS ecosystem being driven by infrastructure, data & information, software & technology, and tech-enabled service providers. Growth and value creation will be driven by both large players that are able to deliver on scale benefits, and smaller players that are able to leverage the benefits of focus and agility. Some of these players will be publicly listed, many will be privately owned and a few will oscillate in-between as they pursue their growth journeys.?

We have enjoyed serving many of the leading infra, info and tech providers over the past decade – through understanding their core client base from our FS advisory work, supporting their inorganic scaling, transitioning between private and public ownership, and value creation. As the role and value of these providers accelerates, we have organized ourselves to deepen our support for this community via the creation of the FITS (Financial Infrastructure, Technology and Services) platform.

We look forward to continuing the partnership with our clients in this exciting space.?If you wish to learn more about our insights and work in this space, please get in touch directly (via LinkedIn).