- 78% of IT leaders believe senior
executives do not understand technology and 81% are frustrated by
unrealistic C-suite expectations
- 86% have recently failed to get
traction on a major digital project
Technology departments in financial services firms are unable to
innovate with technologies like Artificial Intelligence and
Blockchain because they have lost influence in boardrooms,
according to leading Information Technology (IT) executives working
in the financial sector.
A survey of over 200 European IT decision makers commissioned by
Excelian, Luxoft Financial Services reveals that 86% of respondents
have recently championed a major digital project that failed
because it did not get past the boardroom. IT executives believe
misconceptions about technology by executives are partly to blame
for these failures – 78% agree that senior executives do not
understand technology and 81% are frustrated by unrealistic demands
to innovate with new technologies whilst also having to cut
costs.
Excelian, Luxoft Financial Services – the financial services
division of Luxoft, a global IT service provider – today
published Confessions of a CIO, a report which
reveals the biggest frustrations of IT executives working in
capital markets, wealth management and corporate banking in the UK,
Germany, Austria and Switzerland.
The report shows IT executives working in the UK are
particularly frustrated by senior colleagues being unable to grasp
new technologies – 85% of respondents in the UK agree that senior
executives do not understand technology well enough, compared to
76% in Germany, 75% in Austria and 87% in Switzerland.
With a lack of understanding of technology, comes unrealistic
expectations about how it should be implemented. 81% of respondents
are frustrated by unrealistic expectations from the C-suite, with
22% going further by saying a lack of support from senior
executives keeps them awake at night. As such, IT professionals are
not being given the tools they need to innovate and some financial
institutions are being left behind in the digital revolution by
faster acting competitors.
“Tensions in financial services IT departments are reaching
boiling point,” said Roman Trakhtenberg, Group Managing Director
and Global Head of Excelian, Luxoft Financial
Services. “Technologists in
finance want to be the gateway to innovation but right now they are
unable to influence decisions at the top. Instead, IT professionals
in finance are stuck dealing with internal legacy systems and
imminent cyber-risks, and are not getting the support they need to
implement real change.”
The report also shows that although top executives want the
company to innovate with technology and most understand its
importance to the business, IT departments remain underfunded. 85%
of respondents say that the CEO understands the importance of
technology within the business, but 78% are frustrated by a lack of
IT investment – 31% also say budget cuts keep them awake at night.
UK based respondents working for small to medium sized financial
institutions were particularly frustrated, with nearly all (97%)
agreeing they needed more investment – whereas only 76% of UK
respondents working for larger firms expressed the same
frustrations.
The case for increased IT investment at banks in Europe was
recently strengthened in September as the European Commission
announced it is looking at ways to treat expenditure on IT systems
as a cost rather than investment – meaning IT spend may no
longer be deducted from banks’ capital ratios when calculating
capital requirements, which may free up additional budget. This
could be a particularly important EU initiative as 75% of
respondents today are frustrated that technology is treated as a
commodity by the business, meaning they believe financial
institutions do not take into account the future value of
technology and see it only as a cost when looking at the company’s
balance sheet.
Despite this, Confessions of a CIO shows that mounting pressures
on IT departments, including cost saving initiatives since the
financial crash, mean IT leaders have lost the ability to innovate.
IT executives are unsure about how to encourage more innovation,
but 41% believe a change in their businesses culture is needed in
order to embrace digital innovation. Half of German-based
respondents say their business needs a cultural change – only 43%
of Swiss-based respondents, 37% of UK-based respondents and 35% of
Austrian-based respondents agree.
“It is harder than ever working as an IT executive in a
financial institution,” explained Roman Trakhtenberg. “They
are underfunded, underappreciated and are often not taken seriously
by their non-technical senior colleagues. CIOs and technology
leaders need to strengthen their hand in the industry if we are to
finally propel the financial sector into the digital age.”
About the Research
Excelian, Luxoft Financial Services commissioned independent
research agency Censuswide to conduct a survey of 202 IT Decision
Makers in the financial services sector, specifically in capital
markets, wealth management and corporate banking in companies with
over 500+ employees; 102 in the UK; 50 in Germany; 30 in
Switzerland; 20 in Austria. The survey was conducted in August
2017. Excelian, Luxoft Financial Services also interviewed eight
senior IT executives at tier one financial institutions under
conditions of anonymity to understand their specific
frustrations.
About Luxoft
Luxoft (NYSE:LXFT) is a global IT service provider of innovative
technology solutions that delivers measurable business outcomes to
multinational companies. Its offerings encompass strategic
consulting, custom software development services, and digital
solution engineering. Luxoft enables companies to compete by
leveraging its multi-industry expertise in the financial services,
automotive, communications, and healthcare & life sciences
sectors. Its managed delivery model is underpinned by a
highly-educated workforce, allowing the Company to continuously
innovate upwards on the technology stack to meet evolving digital
challenges.
Luxoft has more than 12,800 employees across 42 offices in 21
countries within five continents, with its operating headquarters
office in Zug, Switzerland. For more information, please visit the
website.
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with or furnished to the Securities and Exchange
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