Four barriers and three opportunities for FS execs

Financial services is among the industries most susceptible to future disruption, according to the latest Disruptability Index Accenture has released. 

Reporting on trends from 2018, we found the position of insurance on the matrix (below) has shifted dramatically – it has moved over the years from 19th out of 20 sectors in terms of current levels of disruption to being among the most disrupted. And while it has long been rated as one of the sectors most likely to be disrupted in the futurethe latest results further reinforce this analysis.

Source: Accenture Research Disruptability Index 2.0

 

This places insurance in the period of disruption that we call Volatility. In the seven years from 2011 to last year, more than four out of five industries (83%) have been in that period.

Being in a disrupted industry can take its toll. A whopping 3,217 US companies in the sectors we studied went out of business in those same seven years.

If we look at financial services with this backdrop, it’s clear the industry is changing fast. And of course, technology is playing its part in disrupting the industry. But the truth is that the people will always make the difference.

Accenture has looked at the people component of the financial services industry in particular. In our report Shaping the Agile Workforce, we explored how to create the agile workforce that will create the agile organisation which, in turn, will be equipped to not only cope with disruption but to profit from it.

Here are three opportunities executives can capitalise on.

  1. Build a workforce shaped by insights. Big data can really help here. By investing in predictive intelligence, companies can lay the foundation for improved decisions as well as create an infrastructure that supports a more agile workforce.
  2. Expand what the word “workforce” means. Workers are increasingly no longer bound by the bricks-and-mortar of the company office. HR policies and procedures can improve agility when they recognise freelancers and contractors as part of their overall talent acquisition and retention strategy.
  3. Prepare existing workers for a digital future. Re-skilling and “new-skilling” are key strategies that will keep the workforce relevant. Crucially, these new skills bring forward human strengths in the collaborative relationship between people and machines.

This is not news to the FS industry. Nearly nine out of 10 FS organisations are aware of the pressure they face to become more adaptive. In doing so, they face some significant barriers.

  • A lack of capability in data science and artificial intelligence (reported by two out of five execs).
  • Hierarchical structures that are oriented around cutting fixed costs and fixed skillsets, and not on cross-functional collaboration. This is a result of…
  • Fixed, detailed, rigid job specs. Think about it from a personal point of view: do you even know what your own job spec is? When was it written? If it was over a week ago, is it still relevant to what you actually need to accomplish today, this week or this quarter?
  • Fear of change. One in seven execs named fear as a barrier to change.

Transforming the culture and the way FS organisations approach their people can have a profound and positive impact on their transformation efforts. Four out of five (78%) of FS execs agree that they are under competitive pressure to innovate, and three out of four (73%) say that corporate bureaucracies are stifling productivity and innovation.

This represents a significant opportunity for South African FS organisations to be agile enough to respond skillfully in the face of the coming disruption.

Learn more about how to manage disruption by downloading The Wise Pivot. Or, contact me to discuss how Accenture’s international research can help you understand and prepare for the coming disruption.