Survey finds firms need to strike a balance between ensuring operational resilience in the short-term whilst driving digital innovation to meet longer-term goals
With the UK entering a third lockdown, the financial industry needs to continue finding innovative ways to navigate the ongoing COVID-19 pandemic. Financial services providers face a range of challenges as they seek new ways to leverage the insights within their data to improve customer experience and modernise business processes.
The study surveyed 148 senior decision-makers working for leading insurers, private equity firms, wealth managers, banks, and other financial service companies in the UK. The Innovation Equation Report provides a comprehensive insight into the challenges the sector faces right now, and how new technologies are driving digital transformation in the industry.
Overall, 50% of respondents said that delivering an omnichannel customer experience is the key challenge for them right now. This comes at a time when financial services face even greater demand for streamlined, omnichannel experiences that engage customers – across a range of digital platforms.
34% of respondents also stated improving agility as another key concern arising due to the impact of COVID-19. Since one of the core elements for financial services firms is maintaining operational resilience during uncertain times, the need for systems and architecture that provide the agility and flexibility required to meet short-term challenges whilst also supporting longer-term digital transformation initiatives is essential.
When it comes to addressing the key challenges firms face due to the COVID-19 pandemic, 49% reported the main barrier as maintaining operational resilience, defined as a firm’s ability to continue to provide important business services, even in times of considerable disruption. As organisations work harder than ever to adapt to the challenging landscape, they need to ensure systems are agile enough to cope with uncertain operating environments.
And when it comes to optimising customer engagement processes, of those surveyed, 53% said they would consider cloud-based applications to optimise their customer engagement and marketing. Only 7% of respondents indicated that they would not be interested in using cloud-based applications to enhance the customer engagement experience.
Financial institutions also find themselves operating in an increasingly complex regulatory environment, reflected by 72% of respondents who noted regulatory changes as their most challenging day-to-day process. In an industry characterised by its regulations and increased scrutiny, there’s little room for error. Some firms stated that legacy systems and data silos were making it more difficult to stay on top of burgeoning regulatory changes.
Almost two-thirds of respondents said a significant barrier to initiating a digital transformation programme is due to cybersecurity worries. Concerns come after a record number of incidents amid COVID-19. Nerves are also reflected after news that 65% of financial service firms have suffered a cyber-attack in the last 12 months.
Dean Carroll, General Manager at Xpedition, commented on the report: “The COVID-19 pandemic has brought significant disruption to the financial services sector, with many firms setting aside longer-term plans for digital transformation in order to tackle more urgent day-to-day challenges.”
“However, intelligent cloud-based business applications, which can be deployed in a modular, cost-effective manner, offer organisations a route to more flexible, efficient and responsive operations in the short term, while still opening up the path to wider transformation in the future.
“The key challenge for anyone in an organisation tasked with driving change through innovation initiatives is making sure that they consider all of the issues identified in the survey, whilst also navigating the requests from each division – and all the while thinking about the wider business strategy. It’s a difficult task, not made any easier by the current situation, so you should consider an experienced, trusted partner that understands your challenges and can help you envision your digital future with modern, cloud-based business applications tailored to meet the needs of the financial services industry.”
You can read the full whitepaper, The Innovation Equation, in partnership with FStech, here.
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