From cryptocurrency to online banking, social media recruiting to IoT, the digital landscape of the financial industry has completely disrupted traditional processes. Now the digital transformation is leaving financial institutions and credit unions lagging in productivity as well as taking other hits like higher costs, less intelligent decisions, and less satisfied customers, according to a new survey by Dimensional Research and Alfresco.
The survey, posted by Credit Union Times, included 307 U.S.- and U.K.-based IT professionals and found that 40% of the respondents thought that the banking industry was the most likely to suffer hits by falling behind in the rapid world of digital processing. This failure can lead to losing customers and losing trust, in which case investing in financial institutions insurance comes in handy to protect against losses.
The most commonly predicted benefits of digital transformation were improved employee productivity at 74%. Efficiency-driven cost savings came in second at 71% and then higher customer satisfaction. Financial institutions and credit unions are not alone in feeling pressure to take advantage of being more digitally apt as retail, healthcare, government, and airlines are other industries slow to go with the flow of digital disruption. Obviously there’s plenty of work to be done.
Industries such as manufacturing, insurance, automotive, transportation, and hospitality have been able to capitalize on the new digital landscape a little better.
Edging Out the Competition
The survey also pointed out that not all credit unions or financial institutions felt like they would feel the negative effects of digital disruption. About 50% of the respondents in the financial services or insurance sector felt like there companies were actually more likely to cut a corner for themselves compared to their competitors. The other half worried they would be on the other end of that spectrum.
Adopting new technologies and setting a course of action to adjust to the new landscape has opened the doors for new opportunities. Lack of vision and leadership, and lack of education, can all combine to set companies up for failure and to be lost in the dust of competition.
The technology component of the digital transformation itself isn’t the most intricately difficult thing that executives are worried about in the financial industry. In fact, 78% of those surveyed said the accompanying people changes, including culture, are more difficult. Altogether, the landscape in which credit unions and financial institutions find themselves and will never go back to how things were. It’s up to executives and dedicated teams to figure out the best course of action for setting goals, learning lessons, and developing strategies to maximize capital and efficiency.
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