New research released by Bishopsgate Financial has identified the key barriers to change that the UK’s financial institutions face, as they shift their focus towards revenue growth and away from cost reduction in the year ahead.
The Bishopsgate Financial Change Perspective report spoke to senior leaders from over 30 prominent financial institutions in the UK and found that while the industry has made significant progress in transforming in recent years, the broader change culture within an organisation was the biggest barrier to change (42%).
A wider skills shortage and availability of people has been flagged as a key barrier to change (37%), while the lack of available budget (35%), legacy systems (33%) and the regulatory landscape (35%) were also highlighted as key pain points.
The critical skills are in short supply across the industry, and in most organisations, key individuals become the limiting factor to many change projects and programmes. Skills in digital, cyber, and data analytics are all in demand, as organisations continue to develop digital platforms.
Economy and Politics
The Brexit process itself has illustrated many of the classic challenges in delivering change. Therefore, it is no surprise that, in 2019, the overwhelming area of change planned for the year was Brexit (87% of respondents).
Most players have been working on contingency plans for some time and given the continued lack of clarity, this will continue long in to the future. This is not just an issue for UK based banks, but also European banks doing business in the UK.
Driven in part by a desire for candidates to work for strong, ethical businesses, corporate social responsibility (CSR) is a significant area of focus across the sector (76% of respondents). CSR now makes good business sense however these initiatives can’t be seen as merely ‘window dressing’.
Another topic expected to grow in focus in the coming years, particularly after the impact of Extinction Rebellion and other global protests, is climate change. While this may not be true yet (only 8% of respondents have significant change activity planned for this year) regulators will soon be examining banks plans in more detail.
Mike Hampson, CEO of Bishopsgate Financial said, “Due to an intense focus on cost reduction since the 2008 recession, change has often been perceived as a threat rather than an opportunity by those affected. A renewed focus on revenue growth, however, will begin to change that in the year ahead.
“The emerging FinTech players are built on new platforms and are adept at delivering change swiftly meaning they are well positioned to capitalise on growth opportunities. Therefore, the legacy players need to continue to press ahead with their change agenda and address the barriers to change we have identified in our report.”
Now in its second edition, the Bishopsgate Financial Change Perspective speaks to industry leaders at the forefront of change, including COOs, CIOs and Heads of Change and senior programme managers from over 30 prominent financial institutions in the UK. The research took place during the 2019 budgeting cycle, ensuring the critical priorities were identified for the year ahead.