59% of Financial Services Firms Acknowledge Risk Aversion Towards Technology Adoption

A recent survey of senior decision-makers at UK-based financial services firms revealed that:

• 78% consider their use of technology for internal processes to be strong.
• 86% are confident in their customer-facing technology.
• However, 59% described their firm’s approach to adopting new technologies as risk-averse.

New research from Davies indicates that while financial services (FS) companies are confident in their current tech usage, this risk aversion is limiting their ability to capitalize on new technologies and innovation.

The survey, commissioned by Consulting at Davies and involving 501 senior decision-makers from UK-based FS firms, found that over three-quarters (78%) rated their firm’s internal tech use positively, and an even higher percentage (86%) were confident in their customer-facing systems.

Moreover, 42% of FS firms prioritize technology investment, making it the second-highest focus, just behind improving operational efficiency.

Yet, nearly two-thirds (59%) acknowledged that their firms are cautious when it comes to adopting and implementing new technology.

The survey also pointed out that 38% of respondents identified a lack of digital skills within their organizations, potentially contributing to this cautious approach. Key challenges for firms included technological disruption (26%) and cybersecurity risks (38%).

Kurt Drozd, Director of Financial Crime & Regulatory Compliance at Consulting at Davies, commented on the findings: “While financial services firms show confidence in their existing technology, there’s a risk of complacency if they don’t adopt a more innovative mindset. Strong internal and customer-facing systems are essential, but risk aversion is preventing many firms from embracing new opportunities presented by technological advancements.”

Drozd emphasized that in today’s rapidly evolving business environment, the successful adoption of emerging technologies—like AI and machine learning—can be a key factor in a firm’s success. He warned that firms slow to adopt these innovations risk falling behind.

“By embracing emerging technologies, firms can tackle challenges such as cybersecurity and digital skill shortages, enhancing their competitiveness and positioning themselves for future growth,” he concluded.