Finance News

78% of finance firms unprepared to react and adapt to unforeseen challenges

Rozi Jones
|
28th July 2021
maze confused adviser difficult
"We’re excited to see how technology is providing a foundation for change, and that investments are being planned to improve processes that can benefit both consumers and financial institutions."

More than three quarters (78%) of senior executives within financial institutions believe their organisation is unprepared to react and adapt to unforeseen challenges, according to research from digital solutions firm, nCino.

Covid-19 is one example which the executives surveyed argue negatively affected their ability to service customers. As a result, over one in three (35%) executives are focused on improving their organisation’s resilience to future disruption through implementing new agile technology.

All surveyed executives plan to increase spend or volume of digital transformation projects over the next 12 months, highlighting the importance for the sector.

The research also found that over half (52%) of consumers now demand a more personalised experience from their bank and, as a result, financial institutions have had to re-evaluate how they tailor the customer journey. However, almost half (47%) of executives say they do not have access to the right information to deliver an exceptional customer experience, with almost two in five (39%) struggling to unify their customer data across platforms and channels.

It is therefore unsurprising that a third (33%) of senior executives expect to increase spend on digital transformation projects that focus on improving customer retention rates. In addition, 31% of executives say establishing a strong customer experience is a significant reason for implementing artificial intelligence and machine learning tools.

However, investment levels vary. Over a fifth (22%) are looking to increase spending between £1 million and £5 million over the next 12 months. A slightly larger number of respondents (28%) are expecting a £500k-£1m increase. Despite spend increasing across the industry, cost pressures are the main barrier organisations face when looking to implement new technology.

Improving the speed of delivery of products is the main factor (40%) driving increased spend in digital transformation projects. For example, when making lending decisions for customers, over a quarter (26%) of senior executives struggle to make timely decisions.

There is also a lack of understanding of the benefits new technology can bring to financial institutions; in fact, 31% of respondents state this is the main barrier for implementing it within their organisation. 28% of executives feel there is a lack of internal knowledge or expertise around the benefits of new technology and therefore limited internal desire for new projects.

44% of firms say they are adopting technology to respond to environmental, social and corporate governance (ESG) trends. While only 37% of organisations are establishing carbon neutral goals, less than 1% noted they were doing nothing in response to the pressures of ESG.

Jennifer Geary, general manager EMEA at nCino, commented: “As the banking industry continues to evolve, this research highlights several emerging themes that are accelerating or playing a role in the transformation of both new and traditional financial services. We’re excited to see how technology is providing a foundation for change, and that investments are being planned to improve processes that can benefit both consumers and financial institutions.

“Financial institutions need to prioritise between short-term and long-term objectives and work to align their products and services with their clients’ expectations and needs. Having the right strategy is important, but so is having the right partner and technology that can offer the flexibility and agility needed to react, adapt and continue to delight clients through any unforeseen challenges or opportunities."

Related articles
More from Finance News
Subscribe
to our newsletter

Join a community of over 30,000 intermediaries and keep up-to-date with industry news and upcoming events via our newsletter.