Forrester Predicts Uncertainty as Brexit Shambles Continues

Here are some extracts from the Forrester report on EU economy developments in 2020, including the tricky matters of regulatory issues, data protection rules and Brexit. Enjoy all you Compliance officers!

If Europe in 2019 has proven too interesting for comfort, Forrester has bad news: 2020 promises yet more volatility. Here are just a few reasons why: US-EU and US-China trade disputes are roiling global markets; Brexit impact estimates range from “expensive short-term headache” to “prolonged drag on GDP growth”; and cyber security threat actors are targeting Europe’s intellectual property.

But with volatility comes opportunity — and in Europe, Germany’s industrial firms, Digital China, and regulators will seize the initiative. In 2020, we predict that:

Brexit uncertainty will continue to depress investment in the UK. The ultimate trading
relationship between the UK and the EU is unclear and is likely to remain so after the new Brexit deadline of January 31, 2020. Unless the UK chooses to either revoke Article 50 and remain in the EU or leave the EU but remain in the European Economic Area or European Customs Union, firms will continue to delay investing in the UK until the trading relationship is clearer.

(IE predicts a hung parliament, with a Labour-SNP-LibDem Coalition failing to agree on Brexit – or a Budget – and collapsing into vindictive in-fighting, factionalism and inevitable EU/Scottish Referendum arguments around May 2020, and then we will suffer another futile GE – Ed )

One of the few bright spots: CIOs will spend money on moving operations that process EU resident data from the UK to EU-27 countries; technical measures; or creating binding corporate rules or model contract clauses to permit the transfer of personal data between the UK and the EU regardless of the EU’s eventual GDPR adequacy decision.

`WOKE’ CONSUMER ACTIVISTS MAY BANKRUPT PROFITABLE COMPANIES

At least one firm will lose more than 1% of revenue when it fails to live by its values. In 2005, Dutch journalist Teun van de Keuken filmed himself eating 17 chocolate bars and asked a judge to convict him of supporting child slavery. The judge declined, so van de Keuken founded slavery free confectioner Tony’s Chocolonely, which as of 2018 had the largest share of the chocolate bar market in the Netherlands.

IE Comment; This may seem a distantly related consumer problem to many in the insurance industry, but it only takes one Twitter celeb, with all followers piling on, to cause your brand a huge headache in the MSM. It could be your track record on developing world catastrophe payouts, too many white men employed at senior levels, or the trans-gender/pronoun issue for online proposal forms and all insurance related paperwork. Do not underestimate the willingness that a minority of activists has when it comes to destroying your brand online – they will make time if they feel a quasi-religious need to pursue the cause.

Forrester also expects Unilever CEO Alan Jope to sell off brands that don’t fit the firm’s societal contribution goals in 2020. Other European consumer packaged goods
firms will follow suit. But CMOs beware: Values-based consumers will punish your firm for making claims its products can’t support, so audit your processes first.

cybercrime data breach hacking fines

DATA PRIVACY

Europe will flex its regulatory muscles in competition, financial services, and privacy. With EU competition commissioner Margrethe Vestager adding digital to her remit, Europe’s tech leaders should expect aggressive antitrust enforcement and an emphasis on the digital single market. Forrester anticipates more consumer class actions and GDPR enforcement in 2020; the EU will also finally adopt the ePrivacy Regulation, which includes new rules for cookie consent, metadata management, and physical data collection.

Open Banking 1.0 and PSD2 have not leveled the playing field and increased competition and customer choice as the EU had hoped — ironically, because EU regulators offered too much flexibility. They’ll try to fix this in 2020 by giving technical guidance on accepted open banking models, API standards, and security standards. Swiss regulators will continue to guide players like Facebook’s Libra by enforcing existing regulations
while supporting financial innovation.

 

About InsuranceEdgeEditor (2174 Articles)
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