McKinsey & Company estimates that financial institutions have three to five years in which to get their digital game plans together. Those who fail to do so could see 35% of their net profits eroded. The time to act is now.
In its own study, Cisco gauges the economic impact to traditional institutions failing to fully implement digital strategies has already totaled $144 billion globally between 2011 and 2015. And Cisco says another $405 billion is at stake… within the next two years alone.
Granted, the financial industry is already more digitized than most other industries, and many banking providers are poised to push further with new digital capabilities. However, Cisco says financial services still captured only 29% of the potential value they could have in 2015. In other words, a ton of money was left on the table. That void will be filled by fintechs, by large technology companies, and by retail banks (even some credit unions) that can innovate the fastest.
The problem, as Cisco sees it, is that traditional institutions simply aren’t keeping pace with the expectations today’s digitally-savvy consumers now demand — in all channels. Fortunately, developing digital capabilities doesn’t always require entirely new investments. As Cisco points out, investments made to achieve one business outcome can be repurposed to drive digital initiatives.continue reading »