By Pavlo Khropatyy, VP, Global Head of Delivery Financial Services & Insurance at Intellias
The finance industry has an interesting and dynamic relationship with technology. As a whole, it has become utterly reliant on digital infrastructure and services in its role as the backbone of today’s connected economies. Look more closely, however, and it’s a sector that has seen huge levels of tech-led disruption as new players have entered the market, positioning themselves as ‘digitally native’ with tech-led innovation at the heart of everything they do.
The problem for many of the incumbent and ‘traditional’ organisations across the sector, however, is keeping up with the pace of change, not least because they are limited by their reliance on legacy IT systems and applications. They struggle to match the creative innovation and agility of their emerging rivals, losing market share to new players who can more easily meet the requirements of younger, more connected generations.
Looking more broadly, traditional financial institutions face multifaceted challenges in their technology transformation. These include not only the technical limitations of ageing IT infrastructures but also regulatory constraints that impede rapid innovation. In addition, cultural resistance within these organisations often poses a significant barrier to adopting new technologies and processes.
One of the ways to address this is to build an effective in-house technology team that can help deliver the changes they need. For this to work to its full potential, however, also requires a cultural shift that mirrors the approach of big tech companies that embrace an innovation-led mindset. This can be extremely difficult when the organisation’s reason for being is focused elsewhere, such as the need to compete effectively in fast-moving financial markets.
Cultural Shifts Needed to Embrace Innovation
One of the main challenges is bridging the gap between existing cultural norms and objectives. Many technology professionals are used to working environments where they are focused on forward-looking projects, and teams are built around employees who are used to building something new. These people are well-versed in handling complex tasks and using the latest technology innovations to meet wider company objectives. Bringing this shared mindset, sense of purpose, and collaborative approach together builds the kind of culture seen across the big tech sector and helps deliver the kind of agility these businesses rely on.
To build this kind of culture, some organisations employ an approach known as ‘rotate me’, which enables members of the tech team to switch between projects and, in doing so, develop a more diverse set of skills and experiences. The challenge for many financial institutions is that they prioritise business strategy and financial operations, and miss out on the benefits of a technology culture where their employees can focus on innovation.
In addition to this approach, financial institutions can consider adopting leadership styles that foster open communication and collaboration. Investing in comprehensive training programs and incentives, for instance, can further encourage employees to embrace technological progress. Importantly, internal communication strategies also need to support a culture that values technical expertise alongside financial know-how.
The Role of Strategic Partnerships
Clearly, this kind of cultural shift represents a long-term commitment and cannot be achieved without appropriate leadership and investment. This requires a strategic vision that goes beyond mere technological upgrades to encompass a holistic approach towards organisational change. Leadership in this context is not just about making decisions on new software or hardware; it involves steering the entire organisation towards a future where technology and business goals are inextricably linked.
One alternative is for financial organisations to focus on their core competencies and, instead, build effective, long-term partnerships with technology specialists who can bring the expertise and cultural norms they need. In this context, they are much better placed to blend industry-specific expertise with tech-led service innovation, performance, and security.
For many financial organisations, forging partnerships with specialised tech firms offers a viable path to integrating cutting-edge technologies. Choosing the right technology partners requires a strategic alignment of goals and values, ensuring that both parties can effectively collaborate to achieve mutual success. However, it is also crucial to be aware of the risks associated with such partnerships, including over-reliance on external entities and potential misalignments in business objectives. This underlines the need to find the right partner that understands the requirements of financial organisations operating in increasingly digital markets.
The finance industry’s relationship with technology is ever evolving. As financial institutions strive to keep pace with technological advancements, they must not only invest in the latest technologies but also foster a culture that embraces innovation. The future will likely see continued trends towards digitalisation, with a greater emphasis on Artificial Intelligence, automation, and customer-centric services. Those financial institutions that can effectively integrate technology into their core operations will be well-positioned to thrive in this dynamic landscape.
