Financial services digital transformation - what’s the hold up?
Digital transformation will help companies build new levels of resiliency as the world recovers from COVID-19. It’s important that companies build a culture strengthened with technology, so they can anticipate change and increase customer satisfaction. While changes in customer behaviour over the past year have highlighted the need for proactive digital transformation, most strategies are reactive, failing to truly understand customers’ needs.
Financial services and insurance customers are embracing digital in numbers that would have taken years to achieve pre-Covid. Research by Adobe in partnership with Econsultancy found that 54% of financial services and insurance firms reported unusual growth in digital/mobile visitors over the past six months. The study discovered that customers are seeking more meaningful interactions both in-branch and online as digital takes over the heavy lifting on basic transactions.
Customers are also seeking advice on how to better control their money. Additionally, they want their service provider to use the data they have to better understand their individual needs and tailor their offering.
Why is digital transformation stalling?
Despite unprecedented demand, digital experiences that wow are in short supply. Adobe's research found that legacy systems are the major barrier to digital progress. At 61%, legacy systems are impacting retail banks the most. The figure stands at 51% for all financial services and insurance firms.
What are the other barriers?
Workflow issues – This is putting the brakes on transformation for 44% of retail banks and 38% of all firms
Internal digital skills/capability – This is an issue for 42% of retail banks and 33% of all firms
Poor data quality – Disjointed data is holding back 30% of retail banks and 26% of all others
Sluggish innovation – Impacting 35% of retail banks and 26% of all others
Fragmented customer insights – 26% of retail banks and 23% of all financial services and insurance firms do not have a full view of their customer
A poor CX strategy – 31% of retail banks and 27% of all others are being held back by the lack of a well-crafted CX plan
How are legacy brands planning to overcome these barriers? What's the investment priority?
53% of Adobe respondents are investing in modernising core systems/technology stack integration
49% reported their top priority was creating meaningful digital interactions. All with the view to improve their customers' financial health
Faster time to market with new products and services at 35% is also a significant investment
What's the outlook?
Modernising core systems and migration to a scalable cloud platform are critical. This helps legacy brands unlock the value of new products, delivered via an ecosystem network or internally. These products will need to be designed with insights into customer behaviour and preferences.
Legacy brands also need the flexibility to develop APIs to drive growth from open banking and open finance initiatives. This will help meet customer demand for more control over their data and tailored solution, again, either internally or via a third-party provider.
Unravelling legacy systems. Changing established processes. Overcoming cultural barriers. All this is a complex business. Brands that do not have the internal capability are turning to agile digital transformation partners for help. Together, they build digital solutions that offer customers a better experience. All while transforming the way they work for the better, ensuring their business is resilient.
We're here if you want to explore how to overcome your barriers and accelerate the digital transformation of your business.