Though most financial services firms consider themselves "fast followers" as opposed to trailblazers when it comes to adopting new technology, they tend to embrace the technology they do adopt and make it central to the business, according to the results of a survey conducted by the Harvard Business Review Analytic Services and Verizon.
The survey polled 672 executives in all industries, including 82 in financial services, on their views on technology. The responses from the financial services professionals indicate an eagerness to adopt new technology, despite the industry's reputation for conservatism.
Some 36% said they were "ahead of their competitors" in use of new technologies, and 68% say they’d "moderately, significantly, or completely changed" their core business strategy in the past three years. Additionally, financial services firms are building new technologies directly into their products and services more than almost any other sector, the survey found. Nearly 75% of financial services respondents said their offerings had at least moderately changed as a result of new technology within the past three years, compared with an average of 68% of the overall survey.
Chart courtesy Verizon
Changing customer expectations are the primary driver behind these transformations, cited by two thirds of respondents. Further, those polled said technology will primarily change customer service functions more so than any other business function.
When it comes to what kind of technology they are using, most of the financial services respondents cited mobile as a primary area of adoption. In terms of individual business functions, 60% of financial services respondents said that marketing, sales, and customer engagement had been significantly affected by mobile, above the average of 50% in the overall survey.
On the opposite end, cloud adoption remained low in financial services, with only 20% of those polled saying their firm made "extensive" use of cloud service. This is primarily due to regulatory scrutiny in the industry -- particularly around privacy and security -- with 50% responding that using cloud was "too risky." Another factor cited for the lack of cloud adoption was being inhibited by legacy systems.
Regarding data analytics, 34% of those polled in financial services said they use analytics "extensively" compared with 32% of the overall survey. Financial services respondents also reported that analytics have affected marketing and customer engagement (51%) and product offerings (39%), both ahead of the overall survey average. Where financial services firms don’t use analytics, 44% cite cost and 44% cite cultural resistance to change.
[Learn more about the Internet of Things at Interop's Internet of Things Summit on Monday, September 29.]
Bryan Yurcan is associate editor for Bank Systems and Technology. He has worked in various editorial capacities for newspapers and magazines for the past 8 years. After beginning his career as a municipal and courts reporter for daily newspapers in upstate New York, Bryan has ... View Full Bio