UK FS firm admit spending almost £1m on failed or cancelled digital projects

UK FS firm admit spending almost £1m on failed or cancelled digital projects

Fear of failure is holding back digital projects at UK financial services firms, which admit spending almost one million pounds on unsuccessful or cancelled efforts, according to a survey from Fujitsu.

FS firms are being driven to carry out massive digital transformation projects by customer expectations, says Fujitsu.

However, fear of failure is holding back the implementation of these projects, with almost three quarters of financials services leaders put off by the costs of failure. This comes as no surprise, as seven-in-10 admit to cancelled projects in the last two years.

Ian Bradbury, CTO, financial services, Fujitsu UK & Ireland, says: "Financial services firms are under pressure from their customers to deliver greater speed, convenience and personalisation, as well as better customer services.

"Digital transformation is certainly a key strategy in helping banks and insurers achieve this, however, despite the sector going from strength to strength, financial sector firms have undertaken unsuccessful projects and lost money. This has made them nervous about deploying new projects."

When it comes to what is preventing firms from successfully completing digital projects, respondents highlight a skills gap, with four-in-five believing that attracting ‘digitally native’ staff will be vital to their firms’ success in the next three years.

Over a quarter of those quizzed believe collaboration is an important element in realising the company’s digital strategy. While almost four-in-five turn to technology experts for co-creation, three quarters go as far as seeking consultancy and training from start ups and organisations outside their industry.

Many firms are already leveraging new technology that will radically change the way they do business. A fifth believe implementing technology will be the most important factor to realising their digital strategy, with cloud computing and big data and analytics playing a key role in helping drive the financial success over the next 10 years.

Continues Bradbury: "Historically, financial services firms have been cautious when it comes to innovation. They are working under strict regulations and the very nature of what they do, means that a radical digital transformation project could have a detrimental impact on people’s lives - for example, negatively impacting access to bank accounts or making insurance claims.

"But this shouldn’t hinder innovation across the sector. Quite the opposite - with the help of external expertise and willingness to implement digital transformation, we can be soon pleasantly surprised at a revamp of the industry."

Comments: (2)

A Finextra member
A Finextra member 19 September, 2018, 10:30Be the first to give this comment the thumbs up 0 likes

Interesting article and no surprises really. Banks have always needed to innovate and the "digital transformation" is no different - but more technically complex. The challenges and risks are abound - look at the latest issue with BA which highlights the need for smarter thinking when it comes to how data is stored/managed and used...

Derek Britton
Derek Britton - Micro Focus - Newbury 20 September, 2018, 08:15Be the first to give this comment the thumbs up 0 likes

Whether digitally-based or not, large scale IT projects are fraught with risk, and statistically are more likely to fail the larger and more draconian the change, according to a variety of sources. 

It is hardly surprising to see an emerging trend in the IT world towards a more pragmatic approach of incremental modernization: taking what's already working and improving it in a meaningful way but without any needless, arbitrary changes. Limiting the number of moving parts is sensible IT project management, and IT teams can still make substantial improvements in terms of application, process or infrastructure change with right tools and the right approach. From a cost, risk, speed of dleivery perspective, smarter modernization projects seem to be growing in popularity and this recent report provides yet another metric as to why that's the case.