According to the study, most financial services firms are not as mature as they may think
A Forrester study (commissioned by Magenic, a business technology consulting company) says that a majority of firms surveyed lack digital transformation readiness, best practices and processes. The study also found that those firms that do adopt digital innovation strategies achieve significant organizational benefits.
The study included in-depth online surveys with 201 decision-makers involved in or responsible for digital transformation at their financial services organizations. Questions focused primarily on how ready respondents believe their firm is to transform digitally, what digital transformation best practices they employ, what barriers they face in pursuing or achieving digital transformation, and what benefits they achieve as a result of digital transformation.
The responses to those questions led to three primary key findings:
Financial services firms are unprepared for digital innovation
While 98% of respondents stated that they had budget allocated for a digital strategy, 95% indicated that they had staff dedicated to it, and 100% rated their firm's digital maturity as 3.3 out of 4.0, only 32% of firms acknowledged consistently using digital transformation best practice innovation techniques—related to idea generation, incubation and implementation. According to the study, this sporadic implementation of best practice innovation techniques indicates that "most financial services firms are not as mature as they may think" when it comes to digital transformation readiness.
Structural, procedural and cultural barriers lead to a lack of digital innovation
All respondents to the study indicated that structural, procedural and cultural barriers inhibit their ability to fully embrace digital innovation and transformation, with cultural barriers proving the most challenging. One quarter of respondents stated that they lacked innovative staff to drive initiatives, 26% stated the corporate culture was too risk-adverse to support digital innovation, and 67% indicated that the culture was too insular, thereby preventing them from looking to other industries for inspiration.
Digital strategies drive organizational benefits
Although digital innovation is in its infancy among financial services firms, 58% of respondents stated that the digital strategies they did employ had a significant or moderate positive impact on driving better customer engagement, 51% said those strategies positively impacted customer satisfaction, 50% said the strategies helped drive positive financial outcomes, and 49% said they helped drive revenue for the company.
However, these positive outcomes were not necessarily aligned with a digital strategy's priorities, suggesting that financial services firms do not understand the role of digital innovation within the organization as a whole.
In addition to identifying these three key findings, the study also provided a number of recommendations for financial services firms as they look at creating or improving their digital innovation strategies. Among those recommendations is to take a disciplined, consistent approach to digital innovation to help drive success; to identify the key barriers to success and strategically work to overcome them; and to consider working with an external partner who can guide the digital transformation from start to finish.