Economist Intelligence Unit uncovered the scale of technical debt in financial services in a report sponsored by Appian
Appian reveals that global leaders in financial services and insurance (FSI) believe that legacy IT infrastructure and applications are holding back their business transformation aspirations and automation objectives. These are the findings of a new report, “Financiers ridden with technical debt,” from The Economist Intelligence Unit (The EIU), supported by Appian. The report’s findings are rooted in a survey conducted by The EIU of more than 1,000 IT decision-makers (ITDMs) and senior business executives at financial services, banking, and insurance corporations around the globe.
The need for business agility, spurred by recent global events, is causing FSI) organizations to reimagine how they do business as they work at an accelerated pace to adapt to change. Notably, close to three-quarters (71%) of ITDMs in FSI organizations report that the growth of technology project requests exceeds IT budget growth, which is higher than the global average of 64%.
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Other key findings include:
- 87% of respondents say their organization has encountered operational difficulties in addressing the challenges posed by the pandemic.
- 81% of FSI leaders say their organization needs to improve its IT infrastructure and applications to better adapt to external change.
- 44% of ITDMs believe inadequate collaboration between the IT function and business units is a chief barrier to digitization, compared to 27% of business decision-makers.
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According to survey findings, automation is viewed as being one of the most important technologies over the next 12 months by 31% of global financial services executives. The report highlights that more than a third (34%) of ITDMs believe that the reduction or elimination of legacy IT would most help their organization achieve its automation objectives. However, only 17% of financial services business decision-makers believe that overcoming legacy IT would be a key factor in helping their firms to embrace automation.
Aegon, one of the world’s leading providers of life insurance, pensions and asset management, has been able to accelerate their delivery of IT applications by embracing digital automation and innovation.
“Automation initiatives are not easy and, with lots of teams launching projects in different groups, we risk making the same mistakes repeatedly. Building a central automation advisory group allowed our project teams to be independent and agile, but also benefit from experience and hard-won expertise,” said Boris Buis, Intelligent Automation and BPM Lead at Aegon.
In 2018, Aegon introduced governance, security and provisioning across the organization within the DevOps space with 20 applications and 10 teams working with Appian. Today, Aegon’s Intelligent Automation Team has 8 total full time employees with 2 dedicated to Appian and enables more than 16 federated DevOps teams within the business to support over 50 applications.
“Financial services and insurance companies must bolster collaboration between IT teams and the business units they serve. Both groups recognize the need to collaborate more to meet their digital and automation ambitions with speed, quality, and security. Our report shows that by working together, modernizing dated legacy systems, and adopting agile methodologies, organizations can overcome barriers to digitization,” said Michael Heffner, VP of Solutions and Industry Go-to-Market at Appian.
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