A report by Pinsent Masons has revealed that financial firms are investing more in improving their customer experience rather than their back-office functions, leaving a huge opportunity for enhancing productivity.
Although it's important to make sure customers have a positive experience with businesses, only 1% of financial organisations said they've invested in the everyday management functions, meaning the number of IT failures have increased by 138% year-on-year.
If businesses focus too much on externally-facing tech rather internal systems and processes, they leave themselves open to failure, Pinsent Masons explained.
"Financial services companies can be seriously undermined by underinvestment in the back office," Alexis Roberts, head of financial services and partner at Pinsent Masons.
"The race to capture market share through customer friendly technology is, understandably, very important but that shouldn't be at the expense of essential architecture."
One way businesses can ensure they stay ahead of the curve in by investing in new technology through mergers and acquisitions (M&A).
Pinsent Masons' report revealed that 70% of financial firms consider acquiring new technology as the most important objective of an M&A strategy, while only 46% think increasing market share is the most important objective.
"Effectively harnessing the power of technology is key for M&A activity and organic growth amongst financial services companies," said Roberts. "This is true across the entire financial services sector - not just fintech and insurtech."
He added that technology will continue to generate traditional M&A objectives including market share and launching in new territories. But businesses that aren't so willing to use new technologies are unlikely to be able to keep up with those that are more forward-thinking.
"Although M&A remains a popular method for growth, we are increasingly seeing financial services companies enter into alliances and joint ventures which give them exposure to new technologies without the same commitment as M&A," concluded Roberts.
-
How the UK is leading Europe at AI-driven manufacturingIn-depth A new report puts the country on top of the charts in adopting machine learning on the factory floor in several critical measures
-
US data center power demand forecast to hit 106GW by 2035, report warnsNews BloombergNEF research reveals a sharp 36% jump in energy forecasts as "hyperscale" projects reshape the American grid
-
UK firms are pouring money into AI, but they won’t see a return on investment unless they address these key issuesNews An SAP report projects increased AI investment, but cautions that too many organizations are taking a fragmented approach
-
Intel makes high-level hires while factory workers are warned of layoffsNews The company is appointing four senior executives as part of efforts to refocus on engineering and customer relationships
-
UiPath names Simon Pettit as new AVP for UK and IrelandNews The seasoned leader will spearhead region-specific transformation projects as UiPath looks to drive operational growth and customer engagement
-
How to empower employees to accelerate emissions reductionin depth With ICT accounting for as much as 3% of global carbon emissions, the same as aviation, the industry needs to increase emissions reduction
-
Worldwide IT spending to grow 4.3% in 2023, with no significant AI impactNews Spending patterns have changed as companies take an inward focus
-
Report: Female tech workers disproportionately affected by industry layoffsNews Layoffs continue to strike companies throughout the tech industry, with data showing females in both the UK and US are bearing the brunt of them more so than males
-
How can small businesses cope with inflation?Tutorial With high inflation increasing the cost of doing business, how can small businesses weather the storm?
-
How to deal with inflation while undergoing digital transformationIn-depth How can organizations stave off inflation while attempting to grow by digitally transforming their businesses?
