How financial executives use technology to mitigate risk

Financial executives see technology innovation as a major weapon against risk, according to results of a new survey.

The FIS Global Innovation Report indicates that 95% of U.S. executives surveyed across industries including retail are turning to technology innovation to mitigate macro risks, and 83% said they have either already been impacted by financial risk or expect to be impacted within the next 12 months.

The most common innovation strategy was technology and systems innovation, cited by 60% of respondents. Fifty-five percent of those respondents cited becoming more competitive as the reason to pursue innovation in their technology and systems.

Meanwhile, 53% of respondents reported that they’re pursuing artificial intelligence (AI) to be more competitive, while 52% are pursuing generative AI tools to be more competitive. Based on machine learning (ML), generative AI can create new content and ideas, including conversations, stories, images, videos, and music

Almost half (49%) reported the pursuit of embedded finance capabilities to improve their competitiveness, and the same percentage reported competitiveness as their reason for pursuing open banking capabilities.

Internal challenges to technology innovation

The survey also examined reasons respondents are having issues with adopting technology innovation in their enterprises. Top replies included:

• 50% of respondents reported a lack of in-house expertise/knowledge.
• 49% reported resistance to change among employees.
• 48% reported a lack of internal technology and/or data.
• 44% reported a resistance to change among top management.

“U.S. financial services firms have been leading the charge in adopting innovative technology to enhance security, customer experience and overall competitiveness,” said John Durrant, banking solutions president at FIS. “Now, as the findings in this report suggest, business leaders everywhere are shifting from a ‘wait-and-see’ approach to a deliberate investment and experimentation strategy. FIS believes this trend will continue as automation and AI pose unique opportunities to streamline operations and enhance customer service while future-proofing against competitors who are diving into digital head first.”

The FIS Global Innovation Report surveyed more than 2,000 business executives around the world. U.S. data is based on a sample of 480 executives from the global study, spanning U.S.-based retailers, financial institutions, securities and investment firms, insurers, fintechs, technology providers, energy and utilities firms, and healthcare providers, as well as other sectors.

The survey was conducted by Savanta on FIS’ behalf in June 2023.