4 in 5 finance firms see legacy IT impeding innovation

Global leaders in financial services and insurance (FSI) believe that legacy IT infrastructure and applications are holding back their business transformation aspirations and automation objectives, according to a new report from The Economist Intelligence Unit (The EIU), sponsored by Appian.

In May and June 2021, the EIU surveyed more than 1,000 IT decision-makers (ITDMs) and senior business executives at financial services, banking, and insurance corporations around the globe.

Findings show that the need for business agility, spurred by recent global events, is causing FSI firms to reimagine how they do business as they work at an accelerated pace to adapt to change. 

Notably, close to three-quarters (71%) of ITDMs in FSI firms report that the growth of technology project requests exceeds IT budget growth, which is higher than the global average of 64%. 

Also, 87% of respondents say their organisation has encountered operational difficulties in addressing the challenges posed by the pandemic.

Further, 81% of FSI leaders say their organisation needs to improve its IT infrastructure and applications to better adapt to external change.

Still more, 44% of ITDMs believe inadequate collaboration between the IT function and business units is a chief barrier to digitisation, compared to 27% of business decision-makers.

The study found that automation is viewed as being one of the most important technologies over the next 12 months by 31% of global financial services executives. 

More than a third (34%) of ITDMs believe that the reduction or elimination of legacy IT would most help their organisåçation achieve its automation objectives. 

However, only 17% of financial services business decision-makers believe that overcoming legacy IT would be a key factor in helping their firms to embrace automation.

“Financial services and insurance companies must bolster collaboration between IT teams and the business units they serve,” said Michael Heffner, VP of Solutions and Industry Go-to-Market at Appian.

“Both groups recognise the need to collaborate more to meet their digital and automation ambitions with speed, quality, and security,” added Heffner.