Global Study: Are Financial Services Firms Doing Enough to Build Organisational Agility?

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 organisational 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, "Organisational Agility at Scale: The Key to Driving Digital Growth". The majority recognise 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 organisational agility.

We identified five key behaviours that are crucial to organisational agility, and then grouped survey respondents based on their level of adoption of these behaviours. “Leaders” (15% of respondents) achieved high performance across all five of the behaviours, while “aspirers” (30% of respondents) achieved high performance in four of them, and “laggards” (55%) achieved three or fewer of the behaviours.

Here are the five behaviours that are necessary for organisational agility:

Continuous planning. They plan in a continuous, real-time manner, which gives them the speed, agility and dynamism they need to innovate successfully.
Fluid structures and processes. Leading organisations build fluid organisational structures and processes. Nearly half claim the ability to reallocate people quickly to where their skills are needed.
Building the future workforce. Leaders are much more likely than laggards to have plans to upskill the majority of their workforce and push specific initiatives to increase employee engagement.
Informed and empowered decision-making. At 80% of leader organisations, all employees have access to timely and relevant data and are empowered to make appropriate decisions.
Measurement and guidance. Leaders have made significant progress in developing tools and metrics to measure the performance of digitally driven innovations. This is giving them a “fail fast” mentality: 94% say they are able to steer away quickly from unsuccessful projects.

Our survey also has a breakout of organisational agility behaviours 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.

agile leaders

Other top findings of how financial services leaders encourage agility in their organisations include:

More revenue coming from digital streams. More than half of financial services firms anticipate upwards of 50% of their revenue to be digital in three years’ time. Because the study was conducted in late 2019, we expect that number is even higher now because the global pandemic will accelerate a focus on digital revenues.
Digital strategy is ever-evolving. Seventy-one per cent say their approach to setting a strategy for growth through digital innovation constantly evolves.
High degree of responsiveness. Sixty-three per cent say their organisation can quickly reallocate people to areas where their skills are needed to take advantage of new opportunities when they arise.
Career growth through upskilling. Seventy-five per cent of financial services leaders agree that employees are encouraged to grow by learning new skills rather than being promoted.
Access to digital tools. Seventy per cent say their company has the tools to measure the performance of new digital products and service lines.

Financial services firms cite legacy technology and bureaucratic culture as top barriers to organisational agility.

Barriers to achieving organisational agility

These findings show that financial services embrace the behaviours necessary for achieving organisational agility. However, our research also found that firms recognise 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 organisational culture and lack of relevant employee skills.

Agile structures and processes are key aspects of organisational 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 organisational 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 access driving digital growth

Data transparency across the organisation is the most impactful change financial services firms can make to achieve organisational 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 recognise 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 standardised processes, as the two biggest enablers of delegated decision-making – and two in five report full data access across their organisation.

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 organisational agility that they need to succeed.

Get an overview of findings from “Organisational Agility at Scale: The Key to Driving Digital Growth” or download the full report.