Strategy

We apply our economic and financial expertise to help firms develop and rigorously test commercial and regulatory strategies, to help them make evidence-based decisions that are grounded in robust thinking. Our insights have proven invaluable for the payments sector in particular, where complex market environments are coupled with regulatory scrutiny.

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how we can help

In sectors where the economic interactions between market participants and their customers are complex and attract regulatory scrutiny, insights from economics and finance can provide a robust foundation for strategy identification and evaluation.

We follow a three-stage framework, which is designed to help firms and their decision-makers develop and rigorously test commercial and regulatory strategies, to help them make evidence-based decisions that are grounded in robust thinking.

A

We help our clients identify the range of feasible commercial alternatives and develop a set of evaluation criteria from their objectives against which potential commercial and regulatory strategies are assessed. Application of our economic and financal expertise provides a robust foundation to ensure strategies are developed and evaluated through a consistent lens.

B

We assess the merits and demerits of the feasible alternatives against the evaluation criteria. Our economic and financial expertise provides an extensive toolkit when assessing alternatives, including technical modelling of how different customer cohorts are likely to respond to each option, scenario analyses focussed on KPIs for how the different options may perform, and likely perceptions of the options by regulators.

C

We support our clients to determine the most appropriate course of action and with aspects of its implementation, such as communicating findings effectively, and in plain english, through stakeholder consultation with regulators, current and potential customers, and end users.

Our experts have extensive experience advising clients operating in the payments sector on their commercial and regulatory strategies, both in the UK and internationally, where complex economics of two-sided markets, significant disruption from within and outside the sector, and increasing regulatory and political scrutiny are commonplace.

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Latest insights

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Murky waters: Dealing with estimation uncertainty in the new water regime

In its PR24 redeterminations, the CMA “aimed up” due to concerns about misestimation in the cost of capital. But focusing on uncertainty in cost of capital estimation alone risks missing the broader picture. Read more

Adapting the RAB model for asset stranding risk

Adapting the RAB model for asset stranding risk

Initial thoughts on how the RAB model could be adapted to mitigate asset stranding risk facing investors in UK gas networks arising from the transition to Net Zero. Read more

Staying Afloat: To what extent is high leverage to blame for the water sector’s financial resilience issues?

Staying Afloat: To what extent is high leverage to blame for the water sector’s financial resilience issues?

Excessive financial risk-taking through elevated levels of gearing is often cited as a regulatory failure in the water sector that has led to the near collapse of Thames and the categorisation of ten firms as ‘Elevated Concern’ or ‘Action Required’ for financial resilience by Ofwat. Read more

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If you’d like to discuss how we can support you or if you’re interested in career or collaboration opportunities, please get in touch.

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