In this series on the digital readiness of European Financial Services Institutions (FSIs), we have spotlighted new research showing that the best-prepared organizations embrace digital transformation in all of their activities across four core business areas: planning, making, selling and managing. Although FSIs recognize that going digital must be an important element of their growth strategy if they are to remain relevant and build revenues, Accenture’s new report, European Financial Services Digital Readiness Report, illustrates they have a lot of work ahead.

What is preventing banks and insurers from becoming the digital champions they want to be, even as they take some steps toward that end?

Based on the results of a 2015 Accenture study, one obstacle we can point to is the countervailing forces of cost-cutting and digital innovation. FSI executives worry about protecting earnings while making a big transition, for example, from physical offices to online operations.


The 2015 study revealed that some FSIs also face some organizational problems that they will have to address to clear their path to digital transformation. In the study, 80 percent of FSI executives globally reported that their culture and talent were only “somewhat” or “minimally” equipped for the digital age. And just half felt that their procurement processes and technology were up to the challenge.

How can FSIs get past these obstacles to digital transformation?

  • Remember that the guiding principle to any strategic visioning must be remaining relevant. That should be a major concern for FSIs because of the potential for digital disruptors and new market entrants to relegate banks and insurers to back-office-type utilities with minimal customer engagement. To maintain their relevance as well as build revenues, FSIs will have to commit the time and resources needed to plan the roles they wish to play in the emerging digital ecosystem.
  • Get started immediately. Don’t get trapped in the linear thinking that you first need to resolve any and all issues with your legacy systems or minimize those systems’ roles to free up time and capital for digital innovation. Find areas where you can score a quick win with digital. That can entail only a small change but one that delivers an immediate impact, such as going paperless at branch locations or bringing some services online. Creating disruptive growth while simultaneously transforming your core will not be easy. But consider digital and legacy, which provides you transaction history and processing power that new market entrants do not have, as a symbiotic system that can work together.
  • Immediately focus on closing the gap between planning to be digital and fully integrating digital into daily operations in three key areas. FSIs need to:
  1. Define—or redefine—the business as customers change behaviors and competition grows fiercer. New revenue pools will replace existing ones with a likely emphasis on service fees, and operating models will become more focused on service level agreements. FSIs need to steer clear of a cookie-cutter approach, because that would not facilitate the differentiation that is critically necessary to ensure long-term viability.
  2. Find ways to remain integral to customers’ online experience to prevent digital disrupters from relegating banks and insurers to backroom-type functions. For example, banks and auto insurers could provide real-time online quotes to customers as they shop for vehicles.
  3. Understand that digital transformation must go beyond enhancing the customer experience and will necessitate changing operating models, with particular attention paid to innovative cost controls to attract investors. Digital sales should account for 50 percent—or more—of an organization’s overall sales. FSIs that have embraced digital already are well ahead in this regard, with an average cost/income ratio of 28 to 35 percent and a customer/employee ratio of 2,500/1. However, the FSIs examined in our study average a cost/income ratio of 58 percent and a customer/employee ratio of 300/1.

To learn more, read: European Financial Services Digital Readiness Report

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