European Financial Services Companies Must Close the Gap Between Vision & Execution in their Digital Strategies, According to...
May 05 2016 - 5:27AM
Business Wire
Banks and insurers in UK, Italy, Germany,
Spain, France are 50 percent more effective at recognizing the
value of digital initiatives than applying them
Major European banks and insurance companies are ready to
embrace digital technologies, but they are nearly 50 percent more
effective in identifying the value of innovations than actually
applying them to streamline their businesses, according to an
Accenture (NYSE:ACN) analysis of 53 institutions in the continent’s
five largest economies.
Accenture’s “European Financial Services Digital Readiness
Index” found that – on a scale of one (basic level) to four (best
practice) – major banks and insurers across UK, Italy, Germany,
Spain and France scored an average of 3.15 for recognizing the
importance of digital as part of their strategy and only 2.10
for their progress in actually using digital solutions to
streamline activities.
The index, which is designed to reflect customer and investor
perceptions, is based on publicly available information, such as
annual reports, websites and news releases, and uses more than 100
metrics for evaluation.
“Digital is universally embraced by financial institutions in
Europe but inconsistently executed,” said Sushil Saluja, senior
managing director of Accenture’s Financial Services group in
Europe, Africa and Latin America. “Our new index, which provides a
benchmark for digital readiness, tells a story of an industry that
recognizes the importance of digital as an instrument of change,
but that has yet to find its footing for the level of
transformation it needs to execute.”
‘Digital Readiness’ Linked to Higher Financial
PerformanceAccording to the report, institutions that achieved
a higher score on the index tended to have lower cost-income
ratios, generate higher returns on equity and maintain higher
average share prices.
No Clear Regional LeaderAccording to Saluja: “No one
country can boast being a digital leader in Europe. When viewed
through a geographic lens, the research results indicate varying
levels of digital maturity among banks and insurers within each of
the five European countries included in the study.” The report
found:
- UK financial services firms outperform
in the planning dimension but have room for improvement in the
execution of digital strategies, the design of new products and
services and digitalizing their internal processes.
- German institutions are followers in
the dimensions related to digital strategies, indicating a less
mature market, with most effort needed to catch up in embracing
digital internally.
- Italian and Spanish institutions
overall need to embrace digital more in their growth strategy, but
may be more consistent than others when it comes to implementing
their declared digital initiatives. They record poor results in
embracing digital in their internal activities.
- French institutions have a clear
digital agenda and are better at leveraging digital to engage with
customers. But like other European players they fall short in
embracing digital for internal activities.
Massimo Proverbio, senior manager director of Accenture’s
banking practice in Europe, Africa and Latin America said: “Top
European financial services firms see digital as a key component of
their growth strategies, and, in many cases have devised a partial
plan on how to integrate digital activities into their businesses.
But this often translates into a number of dispersed initiatives
instead of a structured and holistic action plan to capture value
from the digital market.” According to the study:
- 86 percent of institutions include
digital as part of their strategy, and 63 percent have established
a “chief digital officer”—but only 37 percent have allocated budget
specifically for digital transformation.
- Firms have built online and mobile
presence for engaging with clients via social media, but C-level
executives participate in these initiatives at only 39 percent of
institutions.
- 81 percent of firms highlight their
work with start-ups and universities on digital topics, but fewer
than 60 percent have open innovation initiatives or use digital
technologies in their product development.
Proverbio concluded: “When it comes to technology, digital and
legacy are sometimes seen as mutually exclusive. But while
financial services firms are launching digital offerings—or even
just refreshing existing applications and services—they should also
be shoring up or replacing legacy applications to enable the
digital experience for their customers, derive cost savings to fund
further digital investments and maintain the vast amounts of
transaction history and processing power that new entrants just
don’t have.”
View the full report:
www.accenture.com/EuropeanFSDigitalReadiness
MethodologyAn Accenture Research team created the
European Financial Services Digital Readiness Index by analyzing
the extent of digital transformation of 53 leading banks and
insurers in UK, Italy, Germany, Spain and France. Each
organization’s digital activities and capabilities are analyzed
using a framework of 117 detailed metrics grouped under 42
themes.
About AccentureAccenture is a leading global professional
services company, providing a broad range of services and solutions
in strategy, consulting, digital, technology and operations.
Combining unmatched experience and specialized skills across more
than 40 industries and all business functions – underpinned by the
world’s largest delivery network – Accenture works at the
intersection of business and technology to help clients improve
their performance and create sustainable value for their
stakeholders. With approximately 373,000 people serving clients in
more than 120 countries, Accenture drives innovation to improve the
way the world works and lives. Visit us
at www.accenture.com.
About Accenture ResearchAccenture Research is a global
team of industry, geographic, economic and digital technologies
analysts who provide data-driven insights that identify disruptors,
opportunities and risks for Accenture and its clients. They use
innovative business research techniques such as economic value
modeling, analytics, crowdsourcing, expert networks, surveys, data
visualization and research with academic and business partners to
create provocative points of views published by Accenture every
year. The research in this study was led by Accenture Research.
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AccentureSean K. Conway, +1
917-452-7116sean.k.conway@accenture.comorPetra Shuttlewood, + 44
7788 305373petra.shuttlewood@accenture.com
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