A recent study spearheaded by Consulting at Davies has unveiled a critical paradox within the UK financial services sector: firms are confident in their technological capabilities yet remain hesitant to embrace new innovations.
According to Business Money, the independent survey, which included 501 senior decision-makers from various financial services companies, highlighted a notable discrepancy in the industry’s approach to technological advancement.
According to the research, a substantial 78% of respondents believe their internal technological operations are effective, and an even higher 86% are confident in their customer-facing technologies. Despite this apparent tech-savviness, a striking 59% of these firms are described as risk-averse, cautious about adopting and applying new technologies which could potentially propel them ahead in the fast-evolving business landscape.
The survey further revealed that 42% of the financial services firms prioritise investing in technology, ranking it second only to improving operational efficiency. Nonetheless, nearly two-thirds of the firms exhibit a cautious approach to adopting innovative technologies, which could hinder their competitive edge and growth potential.
Kurt Drozd, director of the financial crime & regulatory compliance team at Consulting at Davies, shared his insights on the findings. “The findings from this survey highlight that while financial services firms have confidence in their current technology, there’s a real risk of complacency if they don’t adopt a more dynamic approach to innovation,” he said. “Strong internal and customer-facing systems are essential components of a successful FS firm, but risk aversion is holding many businesses back from capitalising on the new opportunities that technological advancement is creating.”
Drozd further explained that the challenges of cybersecurity and a lack of digital skills, highlighted by 38% of firms respectively, are additional hurdles that need addressing. He emphasised the critical role emerging technologies like Artificial Intelligence and Machine Learning play in maintaining competitive viability and positioning firms for future growth.
This dichotomy between confidence and caution in technology adoption suggests a need for a strategic overhaul in how financial services approach innovation and risk management.
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