Market conditions

By Callum Jack.

The Japan market—a tough nut to crack for consulting firms in the past—is generating quite a buzz. As organisations start to use consultants more than ever before, consulting firms are sensing huge opportunities and are acting fast, which is intensifying competition.

In the past, Japanese business leaders were loath to spend on consultants for two reasons. First, the culture of international consulting firms didn’t always fit with the Japanese way of doing things. Differences in etiquette, hierarchical structures, and decision-making processes made it very difficult for firms to build strong client relationships. Second, Japanese clients—already sceptical about buying anything intangible—didn’t see the value in buying consulting advice if you couldn’t measure its impact. As a result, the Japan consulting market, valued at just US$1.4bn, is much smaller than its counterparts in other mature economies like the UK, where the consulting market is worth US$10bn and in a much smaller economy.

These challenges have hitherto prevented international consulting firms from really pushing to establish their presence in Japan. However, many of the consulting leaders we’ve spoken with recently are now investing heavily in Japan, and they cite four reasons for their new-found optimism.

By Julie Ahadi.

“Overall, a customer-centric focus is the biggest change in the financial services market in recent years” …said a consultant we spoke to for our 2018 financial services sector market report. And we don’t disagree with her: In fact, the general realisation that putting customers first is key to winning—and staying in—business is spreading like cross-sector wildfire.

With the likes of Amazon, Facebook, and Google leading the charge in delivering A-grade customer experience, the general population has, in a very short space of time, come to expect this level of service as standard. Technology players in other sectors—such as retail—are adopting cutting-edge approaches to improve the customer experience, and this is forcing financial services players to up their game considerably. And there are no exceptions to this rule: Got a huge, immovable legacy system that makes changing existing IT architecture and implementing new systems painful, slow, and expensive? Too bad. Lack the agility to make far-reaching changes in your culture or operations? Boo-hoo. Customers’ insatiable appetite for a simple and immediate banking experience isn’t about to go away anytime… well, ever.

By Edward Haigh.

Contrary to what Bloomberg recently reported me as saying, I don’t think Amazon and Google are poised to become auditors.

I can be fairly certain about this, because both firms’ recent achievements strongly point to the idea that a degree of sanity prevails in their leadership. And nobody in their right mind would actually choose to be an auditor any more, would they?

I suppose I ought to concede that auditors would. For them, the mechanics of the industry work pretty well: Governments oblige companies to buy a very expensive service, every year, from a market in which, for various reasons, there are basically four players. It’s like a dream come true. Well, apart from the actual auditing itself.

For everyone else it must look like a complete nightmare: You’ll spend your life performing soul-crushingly tedious work while being watched over by regulators, governments, shareholders, and the media; you’ll get fined, or even imprisoned, when you get things wrong, and ignored when you get things right; and your clients will be desperate for the day when they can replace you with a robot that does in five minutes what you do in six months, and which charges by the hour. Which might be next Tuesday at this rate. I mean, seriously, you just wouldn’t, would you?