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Banks should eye on emerging markets: Ernst and Young
By siliconindia
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Thursday, 20 December 2007, 17:30 IST
New Delhi: Banks must have a presence in India and other emerging economies to become global, says Ernst and Young, a UK based international consulting firm.
"In the near future, banks will not be able to say they are global unless they have a presence in China, India and a few other countries, because these emerging markets are going to be a major source of financial sector revenue and profit growth," stated Ernst and Young, in a report prepared jointly with UK based research firm Oxford Analytica.
The report, named 'Strategic Business Risk 2008' the Top 10 Risks for Business', noted that a late entry into Asian markets would make it difficult for foreign banks to keep up with competition.
For the Asian banks themselves, the report pointed out, one of the main threats is the rapid transformation from "government bureaucracies into corporate governance and transparency-driven organizations".
The report also noted emerging markets as one of the ten strategic business risks for year 2008 and other risks includes regulatory and compliance, global financial shocks, aging consumers and workforce, industry consolidation or transition, energy shocks, executing strategic transactions, cost inflation, radical greening and consumer demand shifts.
"This is being driven by an escalating regulatory burden in many markets, as well as numerous compliance challenges as companies extend their value chains well beyond Europe, North America, and the BRICs (Brazil, Russia, India and China)," reported the study.