Industry research commissioned by nCino surveyed 200 senior executives in financial services on their digital transformation efforts
nCino, Inc. a pioneer in cloud banking and digital transformation solutions for the global financial services industry, today revealed new research on the views of senior executives within financial institutions on their ongoing digital transformation journeys. All surveyed executives plan to increase spend or volume of digital transformation projects over the next 12 months, highlighting the importance for the sector.
“As the banking industry continues to evolve, this research highlights several emerging themes that are accelerating or playing a role in the transformation of both new and traditional financial services,” said Jennifer Geary, General Manager – EMEA at nCino. “We’re excited to see how technology is providing a foundation for change, and that investments are being planned to improve processes that can benefit both consumers and financial institutions.”
More than three quarters (78%) of respondents believe their organisation is unprepared to react and adapt to unforeseen challenges. Covid-19 is one such example which the executives surveyed argue negatively affected their ability to service customers. As a result, over one in three (35%) executives are focused on improving their organisation’s resilience to future disruption through implementing new agile technology.
Over half (52%) of consumers now demand a more personalised experience from their bank and, as a result, financial institutions have had to re-evaluate how they tailor the customer journey. However, almost half (47%) of executives say they do not have access to the right information to deliver an exceptional customer experience, with almost two in five (39%) struggling to unify their customer data across platforms and channels.
It is therefore unsurprising that a third (33%) of senior executives expect to increase spend on digital transformation projects that focus on improving customer retention rates. In addition, 31% of executives say establishing a strong customer experience is a significant reason for implementing artificial intelligence and machine learning tools.
Transforming their organisation through new agile technology is of paramount importance to all executives surveyed, whereby all state they are increasing investment over the next year. Investment levels, however, vary. Over a fifth (22%) are looking to increase spending between £1 million and £5 million over the next 12 months. A slightly larger number of respondents (28%) are expecting a £500k-£1m increase. Despite spend increasing across the industry, cost pressures are the main barrier organisations face when looking to implement new technology.
Improving the speed of delivery of products is the main factor (40%) driving increased spend in digital transformation projects. With customer satisfaction now a top priority and the demand for loans rising during the pandemic, it is paramount that organisations overcome delays in updating their product offerings. For example, when making lending decisions for customers, over a quarter (26%) of senior executives struggle to make timely decisions. The CIBLS loan scheme, which supported U.K. businesses to stay afloat throughout the pandemic, highlighted why it is so important for the loan approval process to be fast to benefit both the economy and customer satisfaction.
There is a lack of understanding of the benefits new technology can bring to financial institutions; in fact, 31% of respondents state this is the main barrier for implementing it within their organisation. It is therefore unsurprising that over a quarter (28%) of senior executives feel there is a lack of internal knowledge or expertise around the benefits of new technology and therefore, limited internal desire for new projects.
Nearly half (44%) of financial organisations are adopting technology to respond to environmental, social and corporate governance (ESG) trends. In fact, a third of executives (33%) are looking to increase spend on digital transformation to improve their organisations’ ESG efforts. Other areas organisations are focusing on include the reduction of paper consumption (42%), travel (36%), and branches (27%). Over the last year, it has become evident that some financial institutions can easily continue the service provided to customers through replacing paper and regular branch visits with digital channels. This has had a positive impact on the environment and therefore, is being implemented into ESG initiatives. While only 37% of organisations are establishing carbon neutral goals, less than 1% noted they were doing nothing in response to the pressures of ESG.
“Financial institutions need to prioritise between short-term and long-term objectives and work to align their products and services with their clients’ expectations and needs. Having the right strategy is important, but so is having the right partner and technology that can offer the flexibility and agility needed to react, adapt and continue to delight clients through any unforeseen challenges or opportunities,” concludes Geary.