Deloitte believes it has the formula for achieving Prime Minister Malcolm Turnbull’s vision of an “agile, innovative and creative” Australia – at least as far as financial services and insurance are concerned.

For the past 18 months Deloitte and the World Economic Forum have been investigating the “transformative potential of innovation” in financial services.

Deloitte National Financial Services Leader Rick Porter says it is a key moment for the industry, as the country reaches “a point of inflection, transitioning from a product to a services economy”. 

“It is critical that we create the right environment for the financial services sector,” he said.

“We will only achieve the Prime Minister’s vision if there is a concerted effort [from] all financial services’ constituencies… [including] the Government and regulators to be at the top their game.”

The report notes the imminent effects of disruption will be felt in the banking sector.

“However, the greatest impact is likely to be in the insurance sector.

“Disruption is not a one-off but a continuous pressure, so innovation will shape customer behaviours, business models and the long-term structure of the industry.”

Jesse McWaters, Financial Innovation Specialist at the World Economic Forum and lead author of the Future of Financial Services report, was in Australia last week to update the research.

“With Deloitte we have developed a framework for understanding the evolutionary path of emerging innovations and an understanding of which innovations are and will be the most relevant,” US-based Mr McWaters said.

Deloitte Australia Financial Services Innovation Lead Joel Lipman says managing the pace of transformation is the key to success.

“Each business will need to work out how long it can sustain its current business model and how quickly it can transition effectively to its new state,” he said.

“It’s a balancing act. It’s critical that Australian financial institutions are ready for the changes.

“As the Prime Minister says, it isn’t about ‘future-proofing the nation’, it is about embracing the future.”