PUBLISHED: 08 OCTOBER 2019
AUTHOR: SUSANNE CHISHTI
Over the past five years the fintech market has continued to thrive. Global fintech venture-capital investment has soared from $8.5 billion in 2014 to $36.6 billion in 2018. China, the US, UK, India and Germany emerged as the top five countries in terms of fintech investments globally. Over this period, we have seen many more corporates and corporate venture capital funds participate in ever-increasing funding rounds for fintech scale-ups – accounting for a third of global fintech investments.
That does not come as a surprise considering that most leadership teams in banking are concerned about the changing competitive environment across financial services. Digital transformation is a frequent agenda item in board meetings, as the market has shown how much more it values digital companies than traditional banks.
According to BCG, personalisation can boost product sales by 30 to 40% in some retail banking areas, and cut customer churn by 10 to 30% while at the same time doubling or even tripling customer engagement scores. So being digital clearly has a strong bottom-line impact.
It’s not a surprise, therefore, that all banks go through digital transformation programmes. But what is surprising is that the majority of them fail. Last December, The Wall Street Journal reported that businesses predicted digital transformation to be the biggest risk factor in 2019. McKinsey research showed that 70% of complex, large-scale change programmes do not reach their stated goals.
Michael Wade, Professor of Innovation and Strategy at IMD Business School, went even further and found that 95% of digital transformation programmes fail, due to inflexible company structures and culture. He found that the biggest barriers to innovation are rigid business silos and the resulting non-collaborative culture.
So what are the top five reasons digital transformation programmes fail? Find out in this Business Reporter analysis.
This analysis is part of the Future of banking report.
Susanne Chishti is the CEO of FINTECH Circle and FINTECH Circle Institute, Co-Editor of the best-selling “The FINTECH Book”, “The WealthTECH Book” and “The InsurTECH Book” published by Wiley. She is the global fintech influencer, investor and board member. Find out more about Susanne or connect on LinkedIn and Twitter.
Get the latest industry news and content straight to your inbox – sign up to the FINTECH Circle newsletter!