Regulation ‘biggest barrier’ to digital innovation
Written by Peter Walker
The greatest barrier to UK financial institutions developing digital products, services and operations is regulatory compliance risk.
This is according to a report from FIS which surveyed more than 2,000 C-level and senior executives across buy-side, sell-side, insurance firms and retail banks.
Globally, the report found that the operational performance gap between leaders and the rest of the industry is closing, driven by accelerated adoption of cloud technology and automation.
Where this gap exists, ‘readiness leaders’ - the firms that score in the top 20 per cent against the FIS Readiness Index - are focused on using artificial intelligence (AI) for more complex tasks, such as improving customer experience, boosting cyber security and preventing fraud, while the rest of the industry is using it to improve operational efficiencies, risk and compliance.
Martin Boyd, head of capital markets at FIS, said: “Overall, the UK institutions are well-developed in their digital strategies but there is still significant work to be done to modernise systems and adopt new technology to retain their competitive edge.”
The report also revealed that the UK is advanced in migrating critical operations to the cloud, with 38.5 per cent of UK respondents being in the process of, or have already migrated, some of their mission-critical infrastructure to the cloud, compared to 32.4 per cent in the US and 22.5 per cent globally.
However, UK institutions lag behind global leaders in adopting open technology, with the majority of UK institutions (53 per cent) being wary about adopting Application Programming Interfaces (APIs) because of concerns over opening their data and functionalities or wanting to wait for industry standards – while 40 per cent of global leaders have already implemented APIs.