The transformation of the financial industry.

• Author: Wilmarth, Scott
• Position: UB Voices by CBRE

Since the Global Financial Crisis, the financial industry has experienced a great deal of change: change in regulations, changes in technology, and the emergence of new economic realities. The culmination of so many modifications in the industry has resulted in a transformation. A new report by CBRE Research describes the components of this transformation, outlining the impacts of recovery, regulation and technology on the U.S. financial services industry and office markets.

Salt Lake City is featured in the report as an active financial services market. The report defines active markets as those where financial services employment has grown substantially and more quickly than other industries in the market, and where real estate options and skilled labor are more affordable than established markets, such as New York and Chicago. The data gathered over the past ten years reinforces this observation with regards to the local market.

The greater Salt Lake City area experienced rapid economic growth coming out of the Great Recession, and the local finance industry has played a significant role in this recovery. Of the total employee base in Salt Lake City, roughly 10% work in financial activities. In an economy as diverse as Utah's--our economy is consistently ranked one of the top most diverse in the nation, often ranking #1--this 10% total is significant. Anything that impacts the greater finance industry has the potential to moderately impact the local economy.

So what is currently impacting the finance industry that could potentially affect Salt Lake City? Some of the observations highlighted in the report include:

* The industry mix in established markets is shifting

* Lower-cost growth markets have emerged

* Real estate markets in established and active finance economies are healthy

* Technology disruption is real

* Talent competencies are shifting

* Technology is the ultimate disruptive force

Salt Lake City's finance industry is already feeling the effects of this national transformation. A few of the most prominent occurrences affecting the local market are included.

* Lower-cost growth markets have emerged

Salt Lake's financial services industry has grown substantially, and much more quickly than other industries in the market. Since 2010, the financing activities industry has grown 21.9% in Salt Lake City. (The overall employment growth for the market during the same time period was 15.9%.) This number is quite notable, especially...