According to research by Elsewhen, a variety of leadership issues are hindering financial service organisations looking to enter into the hotly contested digital space.
The research conducted by Vanson Bourne, looked at digital progression through the lens of 200 UK decision-makers across sectors including financial services.
Over three-quarters of respondents in the financial services sector work at companies with an annual global revenue of between £1billion and £50billion, and with an annual IT budget of between £1million and £25million.
Despite these considerable resources, those questioned by the survey – the majority of whom work in either IT or customer services /CX, and product development areas of financial services – show little faith in their organisations’ digital capacities:
- Just 34 per cent strongly agree that their companies have been “successful” in digital transformation efforts (compared to the overall average of 55 per cent).
- Ninety-four per cent think that their organisations need guidance in measuring how well digital transformation projects are going, and what else is possible.
- Eighty one per cent point the finger at senior leadership teams, saying they do not understand how to use emerging tech (such as AI and Machine Learning) to benefit business goals.
- Seventy five per cent say that their company’s digital strategy is held back by a lack of implementation experience.
While leadership challenges were reported by decision-makers in all sectors explored by the research – which focuses on sectors including FMCG and retail as well as financial services – they were most acute within the financial services industry.
Leadership problems relating to product experience (38 per cent), technology experience (34 per cent) and lack of commitment to required changes (44 per cent) were all higher in the financial services sector than for nearly all other sectors surveyed, making it a topline issue in an arena dominated by digital disruptors. Seventy two per cent also point to big gaps between digital strategy and what can actually be achieved in their organisations – creating a chasm that may have grave consequences.
Around half of financial services sector respondents say that the impact of failed digital projects include overall strategic objectives not being met (50 per cent), budgets being impacted (47 per cent), and compliance requirements not being fulfilled (47 per cent); all of which could put a significant dent in their ability to compete in a fiercely contested sphere.
Financial services is not alone in its struggles. The study reveals a series of issues around inexperienced leadership and lukewarm commitment at management level, that extend across all sectors explored in the research.
The problem is particularly acute within IT teams for all industries spotlighted by the study. A striking 89 per cent of IT respondents questioned in the survey work in companies with an annual IT budget of £1million+. And yet a third cite a lack of leadership experience in product (32 per cent) and nearly a quarter (23 per cent) cite a lack of leadership in technology as their top strategic concerns.
“This new data confirms what we’ve seen anecdotally in our client work, which is financial services companies’ commitment to continuously using digital to improve customer and employee experience,” says Elsewhen co-founder and chief product and strategy officer Leon Gauhman.
“Yet the findings reveal that financial services more than any other sector surveyed is experiencing a crisis of leadership,” he adds. “Lack of knowledge, experience, vision and managerial commitment is hampering progress, preventing companies from reaching their full potential. It’s clear that a more radical approach is required to translate digital ambition and strategy into innovative products and services.”
Consultancy may have a powerful role to play here, with an impressive 100 per cent of financial services respondents describing their most recent third-party project as either meeting (34 per cent) or exceeding (66 per cent) expectations.
Longer-term relationships work better, however. Overall the survey found that companies that rely on third-party digital services more than half the time, are significantly more likely to say that the most recent digital project exceeded expectations (65 per cent) compared to those who use the same services in half or fewer digital projects (46 per cent).
“It’s good to see financial services acknowledge the importance of consultant involvement in complex digital projects,” says Gauhman. “Given that over two thirds of respondents believe consultants have exceeded client expectations, there is scope to raise the ambition level to match the challenges posed by new players such as fintechs and big tech.”