Banks and insurers underestimate digital transformation challenges, finds Capgemini
Lack of support from leaders and digital skills gaps are the main challenges
Financial organisations are lagging behind in their digital transformation efforts, with lack of support from business leaders and a shortage of skills in the necessary technologies needed to help them succeed.
According to Capgemini, the finance sector is the least prepared for transformation, with those working in the sector less confident their businesses possess the skills needed compared to 2012.
Only 33% of respondents in the research said they think their business has the necessary operations capabilities to push digital transformation forwards, compared to 46% seven years ago. Leadership support also fell, with 41% of executives saying their business had the leadership might to support the digitisation of their business, compared to 51% in 2012.
"This research shows that a reality check has taken place across the financial services industry, as incumbents now understand the true extent of the digital transformation challenge," said Anirban Bose, Chief Executive Officer at Capgemini's Financial Services division and a member of the Group Executive Board.
"In an environment of growing competition and consumer expectation, the view is very different from a few years ago, and it's unsurprising that large organizations have become more realistic about their capabilities."
Major barriers to digital adoption were cited as a lack of "a compelling vision for digital transformation". Without the strategy, businesses have little motivation to push digitisation forwards.
Capgemini's study also highlighted a split between banks and the insurance sector. While insurance firms adopt automation and artificial intelligence more readily than banks, customer experience and workforce enablement are more developed in the banking sector.
"At the same time, this is a wake-up call for banks and insurers to re-examine their business model. Tomorrow's operating model is collaborative, innovative and agile," Bose added.
"The digital masters we looked at are working with an ecosystem of third-party partners, developing and testing ideas more quickly under an MVP model, and nurturing a culture of bottom-up innovation and experimentation. The majority of financial services firms need to learn from the small pool of genuine innovators in their field."
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