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When it comes to embracing key components of the digital business, European insurers and banks need to focus on putting strategies into action.
The Accenture European Financial Services Digital Readiness Report examines 27 insurers and 26 banks headquartered in France, Germany, Italy, Spain, and the United Kingdom, and found while digital is universally embraced, it is inconsistently executed.
The research measured progress and identified best practices across four key parts of the business spectrum: strategy, production and delivery, the customer experience, and corporate culture and operations. Or, put more simply: plan, make, sell and manage.
Across the four levers of digital performance, the Accenture study revealed that European financial services firms perform best in the areas of strategy and sales, and lag behind in product development and operations.
Top European financial services firms see digital as a key component of their growth strategies. Eighty-six percent of the firms studied already have devised a partial plan on how to integrate digital activities into their businesses.
Accenture also found that 63 percent of the top European financial services firms have established a Chief Digital Officer position.
But this often translates into a number of dispersed initiatives instead of a structured and holistic action plan to capture value from the digital market. For example, while the firms surveyed have built online and mobile presences for engaging with clients via social media, only 39 percent have C-level executives participating.
And while most firms include digital as part of their overall corporate strategy, only 37 percent have a dedicated budget for digital transformation.
Based on the performance of the organizations included in the study, digital transformation across the four core business areas is fundamental to capture market growth. In fact, banks and insurance companies that achieved a higher score on the Digital Readiness index also tended to have lower cost income ratios; generate higher returns on equity; and strengthen their share prices.
Market trends, combined with the Digital Readiness research, tell a story of an industry that needs to change, that recognizes the importance of digital as an instrument of change, but that has yet to embark on the level of transformation required to produce sustainable results and high performance.
Any strategic vision should include long-term relevance as a priority. Digital disruptors and new entrants have the potential to relegate banks and insurance companies to back-office utilities, processing transactions, but with minimal customer engagement. To avoid that fate, companies should take the time to establish the role they wish to play in the emerging digital ecosystem.
To learn more, register to download the report: European Financial Services Digital Readiness Report.