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The 2019 Readiness Report finds that certain firms are staying ahead of their competition, growing their revenues twice as fast as their rivals – even as the industry overall has improved its performance across six pillars of growth. So, what sets these Readiness Leaders apart?
Our survey of more than 2,000 senior executives finds three key differences.
First, the Readiness Leaders have made more progress on operational efficiencies, and they’re pushing that even further by implementing robotics, machine learning and emerging technologies to manage day-to-day tasks. As their efficiencies grow, they can free up even more time, people and money to re-invest in activities that will drive growth. This is reflected in the client experience that they’re delivering. For example, 85 percent of the Readiness Leaders can customize services for clients, versus 64 percent of the rest of the industry, who still rely on the more standard reporting output.
And because they’ve cracked the operational side, the Readiness Leaders can deliver data faster. Eighty-nine percent of them are confident in the timeliness of their response to clients, compared to 54 percent the rest of the industry.
The trend continues when it comes to digital, where the Leaders prioritize its application to the customer experience. Thirty-eight percent of Readiness Leaders say that over the next 12 months, enhancing the customer experience is the biggest priority for their digital innovation strategies. Only 25 percent of the rest of the industry said the same.
Second, the Leaders take a different approach to new technologies, talent and culture. A lot of organizations are still dependent on legacy technology. The Leaders have been quick to take advantage as technology vendors modernize their platforms. Forty percent of Readiness Leaders (and therefore their associated technology service providers) have adopted open APIs to enable data flow and automation throughout the ecosystem – compared to 26 percent of the rest of the industry.
Hand in hand with open APIs, twice as many Leaders are moving their mission critical applications to cloud services. They’re also 6 times more likely to invest in artificial intelligence (AI) across their services and 1.7 times as likely to apply that AI investment for the customer experience.
Finally, the Readiness Leaders are rethinking how they work with third parties: 72 percent will hand over non-differentiating functions to technology vendors, versus 55 percent of their peers.
Moreover, because the Leaders are more efficient and more focused on their customers, they can quickly figure out which functions can be outsourced. At the same time, traditional technology vendors are moving towards more service-based offerings around their computerized IP. This in turn gives financial services companies more options as they strive to differentiate themselves and grow at an accelerated rate.
While these three differences seem straightforward, they signal a revolutionary change for the industry. Until now, the market could be divided between large institutions that took an assembly line cookie-cutter approach to their services and smaller niche firms that could tailor their offerings to clients.
Now we’re entering an era in which the scale and automation within larger firms are so advanced that profits can be reinvested into the client experience rather than process. Suddenly, niche firms aren’t the only ones who can offer customized services: and that puts everyone on notice.
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Tags: Technology, Digital Innovation, Customer Segments