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The Actuary The magazine of the Institute & Faculty of Actuaries

Financial services industry most concerned about digital disruption

It has been found that 78% of financial services firms are worried about the impact digital disruption could have on their organisation, making it the most concerned industry in the UK.

Digital technology is now "a pillar of business strategy for financial services" ©Shutterstock
Digital technology is now "a pillar of business strategy for financial services" ©Shutterstock

That is according to a report from Fujitsu, which shows that while 80% of C-suite executives believe digitalisation presents opportunities for them, 92% think they need to evolve from their existing business models to adapt.

In addition, 56% do not believe their business will exist in its current form in five years time, with 63% reporting that their sector has been fundamentally impacted by the digital transformation of operations and processes.

“Digital - and specifically the need to use digital technology to improve service offerings and drive revenue - is now a pillar of business strategy in the financial services industry,” Fujitsu UK and Ireland financial services managing director, Mike Foster, said.

“Both the challenge and potential of digital touches all parts of a company’s business.

“There is a substantial opportunity to embrace the notion of becoming more digitally disruptive. Our research underscores that 96% of financial services organisations have already taken measures to thrive in a digitally disrupted world.”

The research involved surveying 1180 C-suite decision makers from mid to large sized businesses, with the main effects identified as a result of digitalisation being increased innovation, a faster pace of change, and increased competition for talent.

Measures taken to capitalise on the digital economy include investment in new technologies, changing business strategies, and investing in operational improvements, yet 70% of firms do not believe they are evolving fast enough, with complexity, ageing infrastructure, and a fear of change the main challenges.

“The financial services industry clearly recognises the value of digital disruption but, at the same time, it is also the most concerned industry about its implementation,” Foster continued

“Our findings reveal that a focus on digital skills, coupled with greater agility and the right technology partners, are the key factors that would make business leaders feel more confident in their organisation’s ability to thrive amid digital disruption.”