Financial leaders brace for change to address multiple threats, Mayer Brown study finds

New report reveals “seven dimensions” for successful business transformation

June 25, 2024 – A new survey by leading international law firm Mayer Brown, “The Next Organization: Seven Dimensions of Successful Business Transformation (A Financial Services Report),” reveals significant gaps in organizational preparedness for successful business transformation.

The need to transform
According to the survey, which includes insights from 197 leaders from financial services firms, nearly two-thirds of business leaders (64%) acknowledge the need for complete organizational transformation, and 68% believe the current market environment creates challenges to accomplishing business transformation.
In addition:
• Over two-thirds (68%) of financial institution leaders say their organizations are not transforming fast enough (compared to 62% of investment firms)
• While 86% of financial services firms have an overall business transformation strategy in place, most do not look beyond 12 months
• Over two-thirds (64% of financial institutions and 69% of investment firms) believe that their organizations need complete transformation to thrive and create value

Jon Van Gorp, chair of Mayer Brown, said:
“As the law firm advising the world's financial services industry on complex matters—Mayer Brown's signature strength—we undertook this survey to uncover the multifaceted and sometimes conflicting opportunities and obstacles confronting industry leaders, and to establish benchmarking solutions for achieving business transformation. For instance, ESG compliance and capital sourcing present both opportunities and obstacles, thereby complicating strategy development. Our seven dimensions provide a framework for navigating these issues, aiding clients in their transformation journeys. With a clearer understanding of the drivers of transformation, business leaders, in collaboration with their legal teams, are well-positioned to evolve into the ‘Next Organization’."

What influences transformation plans?
Based on the market insights Mayer Brown identified seven key dimensions of a business that is future ready. These aspects are high on the corporate agenda and include:
• Creative Capital: 80% of financial institutions and 76% of investment firms believe that innovative financing solutions (including an increase in private sector credit) will power growth
• Geopolitical Agility: 84% of investment firm leaders say that geopolitical agility will be critical for an organization’s expansion internationally in the future
• New Risk Mindset: Nearly 80% of financial services organizations believe companies must take a proactive approach to risk management to pre-empt crises
• Regulation Anticipation: Over 70% of financial services organizations highlighted regulatory anticipation and being able to adapt quickly to developments as crucial to transformation success
• Sustainability Focus: 77% of investment firms and 69% of financial institutions think that leaders must embrace sustainability if they are to thrive in the next economy
• Tech Resilience: 77% of investment firms and 69% of financial institutions believe that their organization must demonstrate resilience against increasing cyberattacks and keeping ahead of AI developments
• Visionary Growth & Leadership: Nearly 80% of financial services organizations believe visionary leadership will enable companies to grow and outpace competitors in the next economy

What accelerates transformation?
The findings suggest that several macro forces are capable of driving corporate progress between now and 2026. These are summarized as:
• Over 60% of both financial institutions and investment firms say the end of cheap money is encouraging a pivot towards cheap capital
• 68% of financial services organizations believe that increasing stakeholder activism will encourage positive change by improving corporate accountability
• Over two-thirds of investment firms (66%) and financial institutions (67%) believe that the unpredictable regulatory environment will drive business forwards
• 68% of financial institutions and 71% of investment firms say geopolitical turbulence will encourage new ways of business
• The number one accelerator for AI transformation according to investment firms is M&A – 83% of leaders cite M&A as the way to advance AI capabilities

The Next Organization Report
The Next Organization report analyzes the hurdles to business transformation and outlines a “seven-dimension solution” that will help businesses overcome these challenges and successfully compete in the economy of the future.

These seven areas are: Creative Capital, Geopolitical Agility, New Risk Mindset, Regulation Anticipation, Sustainability Focus, Tech Resilience, and Visionary Growth and Leadership.

Read the full report.

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Media inquiries
Stacey Berkowitz (Americas)
sberkowitz@mayerbrown.com

Caroline Davies (UK)
cdavies@mayerbrown.com

Notes to editors

About The Next Organization report
Mayer Brown conducted dimensional analysis across 90 leaders from banking, insurance, and other financial services companies (“financial institutions”) and 107 leaders from investment banking, asset management, and private equity firms (“investment firms”). The term “financial services firms” refers to leaders of both financial institutions and investment firms. The study covered Europe, Asia-Pacific, North America, Latin America, and the Middle East.

About Mayer Brown
Mayer Brown is an international law firm, positioned to represent the world’s major corporations, funds, and financial institutions in their most important and complex transactions and disputes.

For over a century, Mayer Brown has been recognized as a leader in financial services. One of the firm’s signature strengths is the broad range of sophisticated advice it provides to the global financial services industry, including on transactional, regulatory, and high-stakes litigation and investigation matters.