[By NBC-1TV H. J Yook]Today Oliver Wyman, the leading international management consulting firm, launches its 17th annual State of the Financial Services industry report at the World Economic Forum’s (WEF) annual meeting in Davos. This year’s report focuses squarely on the growth challenge for the industry and identifies several “blind spots” that could impede the industry’s recovery and growth.

The report examines the factors that drove healthy growth in financial services before the crisis and argues that few of them will drive similar growth in the future. Both credit expansion and greater uptake of financial products will continue, but will be bounded by leverage limits and conduct rules. They will be skewed across regions and only emerging markets will experience high growth. Aging in the developed world also poses challenges for the industry. Globalization is in reverse and larger players are constrained. Consolidation will benefit only mid-sized firms, some of whom will leap to the top. Finally, developments in technology and data will challenge firms that are slow to adapt.

There is a range of unmet societal needs that financial services will be instrumental in solving. These include healthcare and aging populations; managing the cost of living challenge; effectively matching society’s long-term saving and long-term financing needs; and, filling the shortfall in global infrastructure and energy finance.

“Despite the severity of the growth challenge, we remain optimistic about the outlook for those firms in financial services that can adapt rapidly to the new world,” said Nick Studer, managing partner of Oliver Wyman’s financial services practice. “Much work remains to resolve the problems of the last decade, but the industry is transforming and the leading firms can begin to return to the challenge of future growth.”