Other parts of this series:
In my first post, I introduced digital technology trends in capital markets firms and the idea that innovation is happening fast––and is crucial for firms wanting to thrive in the future. Today, I want to discuss some of the challenges to adopting digital technology enabled innovation, as well as opportunities to get past the stumbling blocks.
Unfortunately, many firms still struggle with digital innovation. More than 37 percent cite lack of system integration or compatibility as a main obstacle––but what is perhaps more worrying is that several Capital Markets companies suffer from a pervasive lack of buy-in for digital transformation. 27 percent report lack of executive support as a major barrier to innovation, compared to only 17 percent in retail banks.
That lack of executive support has a top-down impact, with 30 percent of capital markets respondents reporting that support from employees is an obstacle at their firm. As a result, change management tops the list of challenges for Capital Markets firms looking to capitalize on their technology investments. This all suggests that executives at capital markets firms have an opportunity to pull employees together to build an effective technological transformation strategy.
Because investment firms tend to be compartmentalized, bringing everyone together is no easy task–– so it is imperative that senior leadership create a clear vision for technology powered innovation, making it a priority and emphasizing communication and training.
Our approach is to use integrated agile development for an increased speed of innovation. An agile approach creates a continuous communication loop between an organization’s business leaders and its technology teams. This communication loop solves real-time, real-world problems as a team, rather than in a siloed environment.
“The value you get from it is that you work only on the things that the business prioritizes,” says Stewart Carmichael, CTO of Schroders Investment Management Ltd.
Carmichael notes that agile development requires a significant investment, but that it pays off, adding that senior executives are much more involved in the technological innovation, how it works and how it can enhance business objectives. That awareness and understanding helps solidify the support for innovation from a senior level, which in turn accelerates employee buy-in and implementation.
Our research suggests that within three years, a third of companies will be benefiting from an agile approach to digital technologies and so it is vital to be finding ways to adopt change. Capital Markets firms are already heavily investing in AI and foundational technologies like cloud computing and data analytics. Investing in the culture of change and adopting an agile delivery approach across the business can help remove stumbling blocks, clearing the path for innovation and benefiting the firm overall today and in the future as the next waves of technologies arrive.