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Reducing costs is the year&#39s big challenge for providers

The key issue coming up is, of course, the launch of stakeholder. This,and the move to 1 per cent margins, will be a real catalyst in the industry.

There will be substantial competition as companies aim to take the market share and inevitably we will see more consolidation.

I hope this year we will actually get the long awaited breakthrough in e-commerce. There will be a lot of developments in industry portals and a large proportion of companies will be trading electronically.

There will also be major structural change driven by regulation, particularly the break up of polarisation. Changes to it will shape the industry for years to come.

As interest rates come down, as they inevitably will, there will be a bigger opportunity for equity-backed investments. But there will a greater challenge for pro viders to bring costs down and present products that bring real bonuses.

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