No business wants to stagnate. But treat your IT infrastructure like an afterthought and you could be severely limiting your company’s potential. Let aging systems continue operating as is, and they could quickly turn into an outdated legacy system and business liability. Yet, for many financial services businesses, there are real barriers that prevent them from investing in their IT infrastructure, including:
- Time: Big projects can eat up time and resource and can detract from innovation and basic business operations.
- Compliance: Very few industries are as restricted around compliance as financial services. There are rules around how data is collected, stored and how it is used.
- Resistance to change: Making a switch to something completely different is intimidating, especially if you’ve worked with the same systems for years. Many financial services businesses see new tools like cloud and AI as complicated, not as opportunities.
- Cost: The initial sticker shock that comes with investing in new technology can be significant. But despite these challenges, most businesses recognise the need to invest in digital transformation.
So, what should financial services businesses be doing to ensure their IT infrastructure is scalable, flexible and agile enough to keep them competitive? These six issues signal an IT infrastructure update is on the horizon.
1. Sub-optimal workflows and processes
Outdated IT often means you're working within the constraints of the platform, rather than best practice. It also means you likely aren't performing at your industry benchmark and missing out on new opportunities for growth. It’s estimated that 30% of a company’s revenue could be lost to inefficient workflows, so having access to the right tools and systems is imperative. Whether it’s using collaboration tools like Microsoft Teams to manage staff, workflow and document storage, or creating bigger and more bespoke systems in the cloud – in a post COVID world, financial services businesses need to have their workflows and processes sorted.
2. Missed opportunities
Cloud and big data offer huge opportunities to businesses, and organisations capitalising on them have an advantage over their competitors. As you forgo these advancements, what results is segregated systems and departments. Data-driven organisations are 23 times more likely to acquire customers, 6 times as likely to retain customers and 19 times as likely to be profitable as a result. Its no secret that the financial services industry is being disrupted by new competitors and tech savvy customers that are voting with their feet, so they need to better understand how data, driven by intelligent analytics can help them be more competitive.
3. Siloed systems and departments
Legacy systems are ill-equipped to facilitate collaboration, however they still form the backbone of many financial services businesses IT. As we all learned during the COVID-19 lockdown - lack of communication results quickly in falling productivity and this impacts the bottom line. Research shows 57% of organisations struggle with data silos and 56% say they are a barrier to meeting their business objectives. What this means is embracing new technology could give you the platform to break down silos and perform better as a business.
4. Flatlining productivity
In any business its important workers can stay on task, and this includes the IT manager. However many IT managers spend more time fixing software and developing workarounds than actually working on improving the businesses systems and technology, which then compromises their ability to respond to change in real time. It’s estimated that $1.8 billion is lost each year in wasted productivity due to obsolete technology.
5. Inability to respond in real-time
Change is the only constant, and legacy systems restrict how quickly a business can adapt. If you're unable to meet market trends, you'll quickly see plummeting sales figures. Research shows 71% of IT departments cite legacy infrastructure as their biggest barrier to business transformation and say it causes a 6X slower rate of product innovation and time to market.
6. Non-existent or actively falling sales
Sadly, if your business doesn't look like it's meeting the same need as your competitors, it’s their bottom line that will benefit. Recent research found 90% of people said that dealing with a company that uses outdated technology would cause them to consider taking their business elsewhere due to concerns over security, privacy or user-friendly convenience.
Just like your employees, your IT infrastructure is a growing, changing system, one that must be actively assessed again and again.
As your network traffic increases, user needs change, data volumes grow, or stakeholder expectations shift, your IT systems must follow suit. If you’re still having a hard time justifying the cost of updating your IT infrastructure, remember there’s often even bigger costs – and substantial risk – associated with preserving the status quo. Concentrate on the updates that help your business expand, and you can easily justify the initial expense, no matter how many zeros there are on the invoice.
To ensure your IT infrastructure is set up to meet current demands and ensure your business is competitive, give Mark Taylor a call on +64 9 630 8118 extn 229.