- The average banking firm in the UK has spent £2,352,000.38 on new software investments in the last year, but not all have succeeded.
- While almost all track digital transformation success, they lack a standardised approach to measurement.
- Six in ten plan to increase their digital transformation budget in the next year.
Almost all (94%) of banking and finance businesses in the UK have had a software investment fail to meet expectations, according to new research. The new 2023 State of Digital Adoption report from technology company, Userlane, reveals that the average firm has spent more than £2.3 million on new software investments in the last year.
Banking and finance firms are grappling with technology adoption challenges
The most common reasons for failed software investments are bad project management (34%), resistance to change amongst employees (32%), and choosing the wrong vendor or technology (30%).
Overall, 44% of companies rate themselves as only ‘somewhat effective’ at making investments in software, with Userlane’s report highlighting the scale of poor digital adoption – the process of accepting, using and maximising technology. What’s more, 52% of banking and finance leaders feel their organisation has a digital skills gap.
According to the research, the most common software adoption challenges (each cited by 30%) are:
- Higher training costs
- Higher costs associated with maintaining old/outdated technologies
- Poor return on investment or value attained from technology purchases
- Increased employee turnover
- Resistance from employees towards adopting new technologies
IT teams are held responsible for digital success – but struggle to measure it
The majority (80%) of banking and finance firms see digital adoption as a priority, but almost all (96%) say they are struggling to improve it. Interestingly, Userlane found that IT (44%) are more likely to be held responsible for improving digital adoption than any other team, including executive leadership, HR, and learning and development.
While 96% say they currently measure the success of their digital transformation projects, the research found there is no dominant approach. Of these, 30% measure improvements in employee productivity and output, 24% track cost savings or revenue growth, and 24% evaluate how well the new system works with existing systems and processes.
Poor software adoption is hurting employee wellbeing and productivity
The report found that over two-thirds (72%) of banking and finance employees see stress-free software usage as important to their overall happiness at work, with 84% linking it to productivity.
Despite this, the majority (94%) of employees reported difficulties in using software, resulting in each employee losing an average of 1.87 hours per week due to software-related challenges. For a business of 5,000 employees, this equates to almost than 500,000 hours of wasted working time every year.
The industry remains bullish on digital transformation
Six in ten (64%) banking and finance businesses are planning to increase their digital transformation budget in the next 12 months, with 22% anticipating an uplift of more than 20%. On average, budgets will increase by 8%
Hartmut Hahn, CEO of Userlane, commented: “The banking and finance industry holds huge potential for transformation through technology. But it’s quite common for business leaders to assume that people will naturally grasp how to use new technology, only to find themselves disappointed when the expected results don’t appear. Overlooking the needs of employees during software adoption not only affects their experience and efficiency but also impacts the return on technology investments and disrupts digital transformation efforts.
Our research reveals that 96% of banking and finance employees are interested in acquiring new digital skills – a positive outlook for the industry. To aid them in their learning and development aspirations, it’s crucial to simplify the digital adoption process. A promising solution to this challenge involves the implementation of a Digital Adoption Platform (DAP). DAPs seamlessly integrate with the software employees engage with, and they can be coupled with analytics tools to monitor and assess digital adoption across hundreds of applications.”