Financial services firms which pave the way in adopting new technologies are outperforming their peers, according to a new study from fintech provider FIS.
The top 20 per cent of performers in FIS's Readiness Index, which scores businesses on their take-up of automation, emerging technology and digital innovation amongst other things, outstripped their competitors on revenue growth and in increasing their assets under management last year.
Of these “readiness leaders”, 40 per cent grew global revenue by five per cent or more while only 22 per cent of other institutions could say the same.
Meanwhile 47 per cent increased assets under management by more than five per cent, compared to just 23 per cent of other institutions.
“Those firms who are investing for the future by taking a lead in automation, data and emerging technology are outperforming their peers in revenue growth, pointing to a ‘tech readiness dividend’ for those planning ahead,” said Martin Boyd, executive director at FIS.
However, just a quarter of the senior executive respondents believe they have the tech capability to support their growth ambitions, according to the report.
Sell-side institutions – including commercial and investment banks and broker-dealers – were ahead in automation of the transaction lifecycle, while buy-side firms including asset managers, fund administrators, pension funds and insurers lagged.
The report attributes this to sell-side firms experiencing greater pressures on their margins, combined with the higher trading volumes they deal with.
Of the readiness leaders, 37 per cent had implemented artificial intelligence or machine learnings in their business while 41 per cent were testing blockchain applications.
This compares to just six per cent and nineteen per cent respectively in the rest of the industry.
Looking at factors outside technology, global political uncertainty outdid Brexit as the respondents' perceived biggest threat to the finance industry.
Just over a third classed this as one of the top three external threats to growth, while 30 per cent mentioned Brexit.