One thing that the last couple of years have taught us is that entire industries and businesses have the potential to successfully change tack and digitally transform in short timeframes.
The financial services industry, in particular, has traditionally been behind when it comes to digital transformation but this is changing. Even before the pandemic online banks were forcing legacy brands to innovate as they competed with digital-native fintech firms such as Monzo and Revolut.
For financial institutions to stay relevant and compete with these digital disruptors, they have had to utilise technology to create personalised products and services for their customers, creating a better hybrid experience and streamlining processes via their apps and websites.
Looking at our Fit for the Future (FFTF) report, it’s clear that those businesses that are further along their digital journeys are better prepared for future challenges and are more likely to outperform their competitors.
Identifying emerging business challenges and analysing how companies of all sizes were prepared to tackle them, our report found that some businesses had not only survived but thrived during the pandemic.
We call them ‘Fit for the Future’ (FFTF) and they can be recognised by six common characteristics. They have a positive attitude to change, are open to new technology, actively plan for their technological futures and have a detailed strategy. They are also up to date with emerging trends and are adaptable.
Thanks to these traits, these businesses were able to manage unexpected challenges such as changing employee expectations, customer’s evolving demands and increased competition, better than the rest. In fact, analysis of our research by the London School of Economics found a link between being ‘fit for the future’ and a stronger financial performance*.
Overall, we found technology plays a large part in being future ready. It has the power to transform ways of working, helping to solve business problems and deliver new and improved services.
Financial services firms recognise its importance, with our FFTF report finding that 69% of organisations in the financial sector now have a roadmap for digital transformation, whilst over half have already started implementing a digital transformation strategy.
The sector is also leading the way in its adoption of modern technologies, with half of the businesses surveyed stating that they like to be the first to try out new a technology, and just a fifth wait for the technology to become mainstream before investing.
This open-minded approach to technology means that the financial services sector is ahead of other sectors in adopting new technologies such as blockchain, Multi-Access Edge Computing, and Mobile Private Networks.
As the world continues to become more digitally driven, those who can use technology to better support the customer experience will win big in the future.
Customers across all industries have become accustomed to a positive digital experience as a result of the pandemic, and those in the financial services sector are certainly no different.
Our research shows that financial services firms believe that their customers are continuing to become more powerful, with 72% of those surveyed believing this to be the case.
These customers are becoming more demanding in a number of areas, including access to better products and services, the ability to interact with brands anytime and anywhere via digital, and needing personalised experiences.
This drive towards digital has led to 44% of financial services organisations believing that their online presence is set to become more important than their physical one.
The pandemic also emphasised a desire to work with more purpose-driven brands, with 63% of financial services businesses saying that their customers are demanding that they have ethical practices and take a stance on social issues.
These demands are leaking into the workplace too. Employees are similarly keen to work for companies that mimic their own purpose and are demanding a more hybrid experience, searching for more flexibility in terms of where they work, how they work and how many hours they work.
With the current uncertainty of the Great Resignation, it is no surprise that the majority of financial services companies believe that providing the latest technology in the workplace and supporting remote working are crucial for staff retention.
Because of this, the industry is looking at having the right technology in place to support this way of working long-term, to create more desirable workplaces and to better support their people.
From unified communications to immersive technologies like Virtual and Mixed Reality, employers will need to make remote collaboration and communication an easy but engaging experience. Not only will this attract new talent, but it will also help retain the talent they already have, otherwise they risk losing staff to competitors.
What’s clear from our report is that as businesses recover after two years of disruption, they are seeing greater value in being prepared for the future, using digital tools to improve ways of working, enhance their sustainability agendas and better support their customers and employees.
The London School of Economics robust analysis of our Fit for the Future Report states that businesses currently reporting average financial performance (compared to their competitors) that increase their future readiness score by ten points will increase the likelihood of outperforming the competition by 36%. Meanwhile looking at all companies’ Environment, Social and Governance (ESG) measures, organisations increasing their FR index by ten points can expect their ESG commitment to improve by six points; increasingly, requests for tender include ESG criteria.
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