Most financial services executives think digital transformation is their company’s most important strategic endeavor.
According to a recent report by Broadridge Financial Solutions, the majority of financial services executives believe that digital transformation is presently the most crucial strategic project for their company. Businesses dedicate about 27% of their whole IT budget to digitalization in 2023, up from 11% in 2018.
Executives claim that artificial intelligence has significantly altered the way they work in 71% of cases. As AI’s capabilities advance, businesses can anticipate more transformation.
New market entrants, including online banks, brokers, robo-advisors, and digital wealth management companies, pose challenges to established financial institutions, particularly on the distribution side of the financial services industry. These young, digital-native upstarts are fast and tech-obsessed; they are not constrained by antiquated methods or ideas. In order to compete, incumbents must also be.
According to the report, “many are aware of the need to reinvent themselves—and quickly—to meet these opportunities and risks.”
Broadridge classified companies as “leaders” or “non-leaders” based on how far along they are in the key areas of digital transformation: innovation culture, use of emerging technologies, modern IT infrastructure, seamless customer experience, internal skill-building, and adoption of security and privacy protocols. The study involved 500 C-level executives and direct reports from 19 different countries.
By using a magic wand
According to the report, most businesses are redesigning their internal data management systems and processes in order to completely embrace AI. Only 19% of the businesses questioned have, however, progressed to a stage where they have an integrated data platform across all of their business areas.
Considering that the transition was moving so slowly, Broadridge asked executives what they would do differently if they had the power to speed change.
The usage of AI across the company would be greatly increased, according to leaders. All enterprise data across the company will be gathered, integrated, and made accessible by them. Also, they would be able to predict customer needs five years from now.
Replace legacy systems with contemporary cloud platforms is the top option for everyone else, according to Broadridge, highlighting the difference in development between businesses that are leading the way and those who are following behind.
We also asked leaders and non-leaders where they saw bigger issues. The hardest challenge for CEOs is juggling creativity with routine tasks. They also mention managing many service providers, inconsistent data and access, and a lack of digital talent.
The largest problems for non-leaders are rigid legacy processes and insufficient funding. A third of respondents lack the resources to operate transportation, while 40% of respondents felt “kept back” by legacy infrastructure.
Lack of digital talent and employee aversion to change are further obstacles for non-leaders.
Advancement of Transformation
The survey revealed certain doable actions that top companies use to quicken change with AI and other technologies. They must first create a shared vision and understanding amongst the firm’s business and technology leaders.
They must also foster an environment that encourages innovation. Digital transformation pioneers have created cultures that value experimentation.