There’s no question that financial services companies still want to thrive in the digital era. The global pandemic has starkly highlighted the need to be able to make changes to the business on the fly. It’s not lack of desire that’s keeping financial services firms from achieving organizational agility. The problem lies in the prevalence of legacy tech and bureaucratic culture. The future belongs to financial services firms that integrate agility into the nuts and bolts of running the business, from the planning process to the decision-making structure and more.
That’s among the findings of the financial services sector in our global survey of 998 executives, "Organizational Agility at Scale: The Key to Driving Digital Growth." The majority recognize that driving digital growth is critical to their long term success. And, perhaps more tellingly, we found that there is a strong relationship between digital revenue growth and organizational agility.
We identified five key behaviors that are crucial to organizational agility, and then grouped survey respondents based on their level of adoption of these behaviors. “Leaders” (15% of respondents) achieved high performance across all five of the behaviors, while “aspirers” (30% of respondents) achieved high performance in four of them, and “laggards” (55%) achieved three or fewer of the behaviors.
Here are the five behaviors that are necessary for organizational agility:
Our survey also has a breakout of organizational agility behaviors across industries. In financial services (see infographic here), the percentage of leaders, aspirers, and laggards was similar to the breakout in the overall survey: 14% were identified as leaders, 28% as aspirers, and 58% as laggards.
Other top findings of how financial services leaders encourage agility in their organizations include:
Financial services firms cite legacy technology and bureaucratic culture as top barriers to organizational agility.
These findings show that financial services embrace the behaviors necessary for achieving organizational agility. However, our research also found that firms recognize that they struggle with some of the key traits.
For example, companies need dynamic planning so they can react quickly to changing market conditions and potential threats to the business. But some financial services firms struggle to achieve this due to inflexible legacy technologies (which lines up with what we’ve seen from other studies), bureaucratic organizational culture, and lack of relevant employee skills.
Agile structures and processes are key aspects of organizational agility. Yet, financial services firms again cite legacy technology and bureaucratic culture as top barriers to this goal. The lack of insightful data and market intelligence was also cited as an obstacle.
Also another challenge to achieving organizational agility is the lack of key performance indicators (KPIs) that reflect the digital era, as cited by 56% of financial services firms in our study.
Data transparency across the organization is the most impactful change financial services firms can make to achieve organizational agility. The financial services companies in our research admit that data, although accessible to a degree, is often siloed within functional teams or out of date. This is on par with the overall average reported across our survey.
But financial services execs also recognize that data is the key to unlock digital growth: Two-thirds of financial services firms point to the free flow of information and data, and standardized processes, as the two biggest enablers of delegated decision-making—and two in five report full data access across their organization.
Bottom line: Financial services must integrate agility into the nuts and bolts of running their business. Only then will more financial services companies achieve the organizational agility that they need to succeed.
Get an overview of "Organizational Agility at Scale: The Key to Driving Digital Growth" findings or download the full report.