Less than half of financial services firms are confident about transitioning away from the London Interbank Offered Rate (LIBOR) by the end of 2021, a global survey has uncovered.
The findings show that just 47% of companies believe they have the talent and capability to transition within the required timeframe, despite 84% having plans in place.
Only 20% say they are operationally ready, 41% admit to lacking a unified and consistent approach across their business, and just 18% have a "mature" LIBOR transition programme.
"The findings indicate that few firms have a holistic transition approach across business units or geographies," Accenture managing director, Samantha Regan, said.
"Past experience and our data suggest that transformations of this magnitude will be longer, costlier and more complex than anticipated."
As the average interest rate at which banks borrow from one another, LIBOR is linked to around $400trn (£322trn) in financial instruments, including credit swaps and securitisations.
However, regulators are set to phase it out by the end of 2021 following a rate-rigging scandal in 2012.
The survey also found that just 15% of companies believe their legal teams are ready to deal with numerous contract remediation, deal restructuring and repapering activities.
In addition, only 14% are confident that their risk management teams have a detailed understanding of the transition activities and the impact of risk management.
There is also a lack of alignment across geographies, with 47% of firms admitting they are not confident they understand regulatory expectations across jurisdictions.
Moreover, many respondents seemed to think the 2021 deadline would be flexible, with one quarter believe LIBOR will discontinue gradually after that, and half expecting regulators to provide relief.
Around 95% of firms with mature LIBOR plans see the switch as a strategic opportunity, while 91% think incremental revenue gained from transition can offset the remediation cost over three years.
"Firms have a choice: allocating resources and talent just to comply with regulations, or using the transition away from LIBOR to transform their business and create a competitive advantage," said Venetia Woo, Accenture principal director, said.
"There's real revenue and cost reduction opportunities for those willing to take the lead on setting and trading these benchmark rates - using the LIBOR transformation as a backdrop to fix costly, archaic and outdated technology and processes, eliminate product servicing inconsistencies, and stabilise and reinforce their client relationship strategies."