Emerging Trends... The Banking Sector

One of the smartest things to do to stay one step ahead is FOLLOWING TRENDS as they emerge. In an attempt to help you do that, we will be exploring in a series certain EMERGING TRENDS across different sectors, with noteworthy concomitant economic consequences. The show begins with the banking sector.

Warren Buffet, one of the world’s richest men propounded what he called the

Fourth Law of Motion. It states thus: “For investors as a whole, returns decrease as motion increase”. The statement is a paradoxical law was put forth by this a champion investor, in 2005 in a letter he wrote to shareholders. Drawing his premises from the experience of Isaac Newton who propounded the three laws of motions but due to his losses in the South Sea Bubble was too traumatized to propose the fourth law. Isaac Newton was quoted to have said; “I can calculate the movement of the stars but not the madness of men”.

Put in another way the fourth law of motion is saying that returns on investment is dependent on motion, so an investment with low motion has high returns on investment. Therefore if there is a business opportunity, an idea or a concept and there are still very few people moving in that direction, returns on investment naturally is high. However as more people (investors) move in, monopoly is broken, there is more competition and so profit naturally declines as profit is spread across more investors.

How is this law related to the banking sector, specifically the workforce in the banking sector? First of all, there is a need to understand that the employment challenge in Nigeria is more of unemployability and underemployment rather than unemployment. There is therefore the need for skilled workforce relative to a particular point in time or relative to where an organization is going. Employees hence need to develop capabilities, not just for present day tasks, but also for the future. As change happens in the banking sector there are winners and losers and the employee in the bank is a potential loser unless he develops himself to be relevant as banks cash in on areas in the sector with low motion so as to have high returns on investment. Get to know who benefits and who losses in our next post.

Picture credit - www.forbesmagazine.com