European financial companies not executing on their digital strategies
- Accenture study finds a gap between vision and reality
- Fewer than 60 percent have open innovation initiatives
- 86 percent include digital as part of their strategy
- But only 37 percent have allocated budget for digital transformation
TelecomTV has featured a number of video interviews recently on the digital transformation of businesses; it’s an area in which both vendors and service providers are keen to extend their influence and open up new revenue streams (see our interviews with Cisco and Software AG for example). This ties in nicely with a study just released by Accenture on the “Digital Readiness” of European financial services companies. However, Accenture found that whilst they talked a good story, reality was a rather different matter.
Whilst major European banks and insurance companies are ready to embrace digital technologies, they are nearly 50 per cent more effective in identifying the value of innovations than actually applying them to streamline their businesses. Accenture conducted analysis of 53 institutions in Europe’s five largest economies, and found that – on a scale of one (basic level) to four (best practice) – major banks and insurers across UK, Italy, Germany, Spain and France scored an average of 3.15 for recognising the importance of digital as part of their strategy and only 2.10 for their progress in actually using digital solutions to streamline activities.
The report found that 86 per cent of institutions include digital as part of their strategy, and 63 per cent have established a “chief digital officer” – but only 37 per cent have allocated budget specifically for digital transformation. Also, whilst firms have built online and mobile presence for engaging with clients via social media, C-level executives participate in these initiatives at only 39 per cent of institutions. Finally, while 81 per cent of firms highlight their work with start-ups and universities on digital topics, fewer than 60 per cent have open innovation initiatives or use digital technologies in their product development.
“When it comes to technology, digital and legacy are sometimes seen as mutually exclusive,” said Massimo Proverbio, senior manager director of Accenture’s banking practice in Europe, Africa and Latin America. “But while financial services firms are launching digital offerings – or even just refreshing existing applications and services – they should also be shoring up or replacing legacy applications to enable the digital experience for their customers, derive cost savings to fund further digital investments and maintain the vast amounts of transaction history and processing power that new entrants just don’t have.”