The COVID-19 pandemic may have adversely affected economies around the world, but not everything is in the doldrums. A Microsoft-IDC study reveals something significantly positive: Financial Services Industry (FSI) organizations in the Asia Pacific region have become largely resilient amid the pandemic as they reached maturity in adopting innovation.
The study found that 70 percent of all Asia Paicific FSI organizations consider innovation a must while 66 percent say that they are already expediting their digital transformation as part of their response to the COVID-19 crisis. The numbers are even higher among organizations with the most mature culture of innovation, referred to as FSI leaders.
Nearly all or 96 percent of FSI leaders who participated in the survey consider innovation as essential, while 86 percent have accelerated their digitalization initiatives to cope with the pandemic.
A culture of innovation across people, processes, tech, and data practices
Connie Leung, Microsoft Asia’s Regional Business Lead for Financial Services, highlights the increase of maturity among FSI organizations when it comes to innovating. “One thing is clear: the industry’s rapid response, reflected in the increase of maturity in adopting a culture of innovation, across people, process, technology and data practices, has paid dividends,” Leung remarks.
FSI leaders have shown outstanding performance in the midst of the health and economic crises brought about by the coronavirus outbreak. The Microsoft-IDC study reveals that 68 percent of FSI leaders expect recovery in six months or less, while 53 percent look forward to expanding their market share in spite of all the effects of the pandemic.
Aside from the reliance on innovation to survive and thrive, FSI organizations also reported high revenue shares from their digital product and service offerings. The study estimates the current digital product revenue share of FSI companies to be around 39 percent. It is projected to rise significantly to 52 percent in three years. For FSI leaders, the current and projected digital product revenue share numbers are higher at 47 percent and 57 percent respectively.
Based on the study results, FSI organizations have matured in their culture of innovation by 12 percent over a span of six months. This improvement infers an enhanced ability to attain sustained innovation.
Maturity in adopting innovation
The maturity of FSI organizations in adopting innovation, as the study shows, manifests in their rapid business process pivot to improve customer experiences and the assimilation of data management insights in efforts to enhance decision making quality and speed. Additionally, FSI entities have also fortified their business continuity plans with the help of cloud technologies, especially with the growing prominence of remote working arrangements.
Michael Araneta, Head of IDC Financial Insights-Asia Pacific, lauds the innovation in the Financial Services Industry. “FSI has maintained its lead, based on our findings, and was assessed to be the most innovative vertical, with the highest culture of innovation maturity score, and the highest proportion of leaders and verticals,” Araneta notes.
Aside from the encouraging statistics on FSI innovativeness, the study presents best practices that can help boost the culture of innovation to stimulate progress among people, processes, data, and technologies. The study recommends that organizations leverage platforms to drive digital transformation. Another best practice is the improvement of employee capabilities through collaborative skilling initiatives. Moreover, organizations are urged to pursue data-driven personalization and rapid value creation as well as automation to support continuous innovation.
Greater collaboration and continuous transformation
While the study highlights the importance of innovation, it emphasizes how vital the human factor is. “As FSIs continue to forge ahead in a post-pandemic world, lasting transformation will only take place if FSIs alongside investments in technology, prioritize people and culture, as they are key to ensuring greater collaboration and continuous transformation,” Leung explains.
The Microsoft-IDC study involved 597 participants who were regional business decision-makers in 15 markets across Asia. It was conducted over a six-month period spanning the times before and during the spread of the pandemic throughout Asia.
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