Outdated infrastructure is still getting in the way of digital transformation at financial services firms and Covid has shown up the cracks in internal processes, research has found.
A survey of 100 financial services firms, carried out in the first quarter of this year by fintech events series Fintech Connect, revealed that their biggest challenge for digital transformation is inflexible and outdated legacy systems, while the pandemic has exposed gaps in process optimisation.
However, the report also found that Covid-19 led to the acceleration of innovation that would have otherwise still be in research and development (R&D).
“As demand for digital services rocketed, it showed up the cracks, bottlenecks and pain points of everyday operations,” the report said.
“At the same time, the upheavals caused by the pandemic have accelerated innovation that otherwise would still be in R&D. Of course, this is in large part a development borne of necessity, with financial services players rising to the demands of our new ‘digital moment’.
“But many have consciously resisted the urge to deprioritise their innovation agendas too: rather than press pause on innovative digital projects, some financial services firms have seized the opportunity to ramp up their development.
“It may be that financial services players of a certain stripe learned the lessons of the last great shock to the sector, when financial hardship meant digital change ground to a halt, only for them to emerge on the other side to find trailblasing fintechs eyeing up their market share.”