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Banking, Insurance execs turn to
IT for competitiveness
Approximately 84 percent of
financial services executives believe that technology
will be crucial to their firms' ability to adapt
business models and implement new strategies.
Technology-led innovation and
changing customer needs will lead to a rethinking on how
to do business between now and 2010, according to study
conducted by Economist Intelligence Unit (EIU) based on
a survey of around 600 global senior level banking and
insurance executives.
As per the survey of 577 senior
executives in the financial services industry from 23
countries in Europe, the Americas and Asia Pacific, the
results indicate that the ability to adapt business
models will become a significant source of competitive
advantage in the banking and insurance industry in the
years ahead.
Conducted by the Economist
Intelligence Unit and sponsored by SAP AG, the study
“Business 2010: Financial Services; Embracing the
Challenge of Change,” found that new business models are
increasingly crucial to competitive advantage. While in
the past banks and insurance companies have focused on
creating new products and services, they are now
rethinking this strategy due to the important role that
technology will play in adapting their business models
for managing customer and regulatory demands.
Other key points include,
expectation of fiercer competition from mergers and
acquisitions, high impact of technology in the customer
service area etc. More than 70 percent of respondents
said that customer-related activities and product
development are areas in which IT will be most critical
in 2010. Banks and insurers will seek data management
and analytical tools to help them improve customer
relationships by predicting customer behavior and
identifying news sales opportunities.
Accurate and timely data management
will be an important focus point according to financial
service executives as it will impact their company's
ability to innovate by 2010. Approximately 84 percent of
financial services executives believe that technology
will be crucial to their firms' ability to adapt
business models and implement new strategies. Regulatory
compliance and corporate governance, including Basel II
and the Sarbanes-Oxley Act, are changing the way firms
report financial results, manage capital and measure
risk, the study said.
After many years of being resistant
to change, banks and insurers are rethinking their
business models and will be looking to technology in the
next five years to stay competitive,” said Thomas
Balgheim, senior vice president, Financial Services, SAP
AG. The EUI survey offers a glimpse into the future of
the financial services. It reveals that a flexible IT
infrastructure that enables rapid response to changing
customer and regulatory needs has the power to
differentiate a company.
Command of technology will be vital
to financial services firms as they adapt business
models to compete in 2010, said Denis McCauley, director
of global technology research, Economist Intelligence
Unit.
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