A significant majority of financial services firms risk falling behind due to ineffective technology adoption, according to a new industry report. The study from GlobalLogic, a Hitachi Group Company, found that 80 per cent of these firms are in danger of declining because of fragmented execution and a lack of a unified strategy.
The research, conducted in partnership with FT Longitude and based on a survey of 750 senior business leaders, highlights a critical challenge. Despite substantial investments and high ambition for digital transformation, many organisations struggle to convert these efforts into tangible business value and sustainable growth.
Mike Connors, Senior Vice President and Industry Leader for Financial Services and Consumer in the Americas at GlobalLogic, explained the report’s purpose. “We undertook this research to better understand why, despite bold ambitions and billions in investment, many digital transformation programmes across financial services fail to scale,” Connors said.
He added, “The data clearly shows that the firms succeeding are those that move beyond siloed initiatives, strategically integrating technology, capital deployment, and organisational adaptability to drive real impact.”
Slow AI Integration and Siloed Teams
The report identifies several key areas where financial firms are lagging. The adoption of generative AI is progressing slowly, with only 52 per cent of firms having initiated pilot projects in a single business function, indicating a lack of enterprise-wide integration.
Furthermore, innovation efforts often remain isolated within departments. Less than half, 46 per cent, of firms form cross-functional teams at the start of a project. This figure drops to just 33 per cent in the banking sector, suggesting a fundamental lack of integrated planning.
Perhaps most critically, the report signals a stagnation in core business models. A mere 20 per cent of firms are actively developing advanced new business models, pointing to a widespread failure to evolve core revenue streams and customer engagement methods.
Joe Fuqua, Head of Enterprise Data Frameworks at Truist, commented on the industry’s core challenge. “For the financial services industry, the key challenge is understanding how to leverage newer technologies to do three things: better serve our customers, improve our operational effectiveness and efficiency, and mitigate risk,” Fuqua said.
How Leading Firms Succeed
The study identified a group of high-performing firms, labelled “Leaders,” who represent 38 per cent of respondents. These firms are successfully growing revenues and maintaining strong compliance even in volatile markets.
These Leaders distinguish themselves through sustained strategic investment. Well over half, 58 per cent, plan to significantly increase their innovation spending. They also embed adaptability into their culture, treating regulatory requirements and talent development as strategic advantages rather than obstacles. They are twice as likely as lower-performing firms to prioritise AI ethics and governance.
The report concludes that the future will belong to firms that can combine a strong technological foundation with value-driven business models and regulatory agility, creating a unified engine for sustainable growth. |
