A recent research report from FIS Analytics revealed the financial services industry is more confident about its underlying technology. The survey tapped into thoughts from 2,000 financial services executives around the world, with some firms identified as “Readiness Leaders”, defined as the top quintile of performers with the highest aggregate score across six operational pillars: automation, data management, emerging technology, digital innovation strategy, client value and risk management.
The growing uptake of cloud is playing a part, helping to make traditionally expensive systems more accessible to other institutions. Yet the Readiness Leaders continue to outpace the rest of the industry in their approach to emerging technology, such as RPA and AI, and risk management. More importantly, they continue to grow twice as fast, with average revenue growth at 3.3% versus 1.5% for the rest of the industry.
Reinforcing efforts to move toward a more open innovation model, the Readiness Leaders are also beginning to harness open APIs on a larger scale: 40% of Leaders have now implemented these, versus only 26% of other firms.
Tony Warren, head of strategy and solutions management at FIS, says it is becoming critical for both buy- and sell-side firms to implement open APIs. “There’s an ongoing shift to make data online, real-time and consumable through open APIs – batch processing will be a thing of the past in the next couple of years,” he says.
As cloud, collaborative innovation and open APIs become more important elements of the digital innovation model, institutions need to recognize that they will increase the number of potential target areas for cyberattacks. Not only are the Leaders more confident about their cyber risk capabilities; they are more sophisticated with their approach to risk management, seeking to add value for their customers by providing more sophisticated risk information.
Among the investment banking respondents, for instance, the Readiness Leaders feel this is the area where they can provide the greatest marginal difference in added value for customers in comparison with their competitors, according to the survey.