Spending by financial services companies on improving customer interfaces may be coming at the expense of investment in crucial back office IT systems, suggests research by Pinsent Masons, the international law firm.
Just 2% of financial services companies surveyed have prioritised investment in back office technology over the last three years, whilst 77% have prioritised investment in enhancing customer experience.
FCA research shows the number of IT failures at UK financial services companies has increased 138% over the last year alone to 600.
MPs have also been vocal in urging financial services companies to invest more in back office technology in order to better protect consumers. The call came as part of the launch of an inquiry by HM Treasury into IT failures in the financial services sector last month.
Pinsent Masons explains that investing in back office technology is vital in reducing the risk of operational incidents, such as systems failures and data breaches.
Alexis Roberts, Head of Financial Services and Partner at Pinsent Masons, says: “Financial services companies can be seriously undermined by underinvestment in the back office.”
“The race to capture market share through customer friendly technology is, understandably, very important but that shouldn’t be at the expense of essential architecture.”