In the UK the greatest barrier to digital innovation is regulatory compliance risk.
This is the key finding from FIS’ global Readiness Report.
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By comparison, the biggest barrier to digital innovation for US firms is complex legacy IT systems.
Globally, the report concludes that the operational performance gap between leaders and the rest of the industry is closing.
This is driven by accelerated adoption of cloud technology and automation.
Where this gap exists, Readiness Leaders are focused on using AI for more complex tasks.
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By GlobalDataExamples include improving customer experience, boosting cyber security and preventing fraud. Meantime, the rest of the industry is using it to improve operational efficiencies, risk and compliance.
FIS defines ‘Readiness Leaders’ as firms that score in the top 20% against the FIS Readiness Index.
Martin Boyd, Head of Capital Markets at FIS says: “Overall, the UK institutions are well-developed in their digital strategies. But there is still significant work to be done to modernise systems and adopt new technology to retain their competitive edge.
“Financial services leaders are charting a path to success by aligning technology, operations and talent to support new business models.”
FIS Readiness report: other key findings include:
The UK is advanced in migrating critical operations to the cloud. 5% of respondents are in the process of or have already migrated some of their mission-critical infrastructure to the cloud. This compares to 32.4% in the US and just 22.5% globally;
- UK institutions lag behind global leaders in adopting open technology. The majority of UK institutions (53%) are wary about adopting APIs. Reasons include concerns over opening their data and functionalities or wanting to wait for industry standards. Around 40% of global leaders have already implemented APIs.
- UK institutions are using AI technology for basic tasks. 46% of UK firms are focusing on applying AI to basic tasks such as automating processes rather than value-add activities such as personalised advice (26.4%).
- Emerging tech, risk management and organisational structure is driving faster growth. Globally, leaders continue to grow their annual revenue more than twice as fast as the rest of the industry. They are doing this by better applying new technologies, sourcing and managing the best talent and aligning organisational culture with their strategic vision.
Boyd adds: “While the capabilities gap is closing, all financial institutions need to leave legacy models behind. They need to move towards a more agile, open innovation model. And they need to take a targeted approach to emerging technology to maintain a growth advantage.”
