Other parts of this series:
Europe’s financial services institutions (FSIs) face several pressure points that are compelling them to go digital. But from a customer’s and an investor’s perspective, what does the digital transformation of banks and insurers currently look like? Are FSIs progressing far and fast enough these important stakeholders?
New Accenture research clearly shows there is considerable work to be done by FSIs if they are going to transform themselves into digital operations that deliver the rich experience customers demand and the profits investors require.
Just consider: Consumers expect their banking and insurance servicing needs to be met immediately. In addition, new market entrants are building financial transactions seamlessly into their customers’ digital experiences in an effort to take FSIs not only out of the loop but also out of customers’ sight.
Given those challenges, I’m encouraged to see that major European FSIs understand they could shore up and build their relevance and revenues by embracing the digital concept. But new Accenture research, detailed in our European Financial Services Digital Readiness Report, underscores that FSIs have significant ground to cover “to close the gap between aspiration and application.”
We examined the digital readiness of companies in several industries and compared it to that of 26 large banks and 27 major insurers headquartered in France, Germany, Italy, Spain and the United Kingdom.
We measured these organizations’ progress in going digital and identified the best practices across four key areas of the business spectrum: strategy, production and delivery, customer experience, and corporate culture and operations. For sake of brevity, I’ll refer to those areas as planning, making, selling and managing.
Here is what we found. Our scoring is based on a scale of 1 to 4, with 4 being the highest rating:
Digital disruptors, such as Google, Salesforce and Uber, perform highest in those four key areas with a 3.5 score on average. The next best performers are the electronics and high tech industry at 2.8 and then the communications industry at 2.5. European FSIs score more than a full point lower than digital disrupters at 2.35, which is only slightly better than the utilities sector. The consumer goods and services industry and the energy sector score the lowest, more than a half point behind FSIs.
FSIs score their highest in planning and selling. But at 2.68 and 2.33, respectively, they still fall far short of digital disrupters’ overall average score. Within the planning area, FSIs performed their best in the subgroup “seeing” what they need to do, scoring a respectable 3.15. But they sharply fall off to 2.58 at “planning” based on what they see and 2.32 for “acting” on those plans. Within the selling area, FSIs score 2.56 at “engaging” the customer and 2.48 at “selling.” But then they drop to 2.32, slightly below their overall average score, in “serving” customers.
In making their digital products and services, FSIs score below their overall average at 2.33. While they score 2.68 at “building” their offerings, they are much weaker at “designing” them—scoring 2.29—and “running” them—scoring 2.10.
FSI’s performed poorest in managing, scoring 1.93 on average. Their greatest weakness in this area is “assessing” their products and services, scoring 1.68. But FSIs were not much better at “improving” their offerings, scoring 1.88.
Among the 53 banks and insurers we examined, only three scored well in all four areas, and only five FSIs were strong in three areas.
Next time: The problem with many FSIs’ digital strategies, and the benefits for those that are digitally ready.