Despite the turbulence that many businesses have faced due to the Covid-19 pandemic and its wide-reaching impact since early 2020, it appears that digital transformation strategies have remained resilient among numerous organisations during this period. Businesses are continuing to make positive strides in their digital journeys, driven by the emergence of new technologies.
New analysis from Visma | Onguard’s Fintech Barometer, now in its fourth year, discovered that the number of organisations planning to undertake a digital transformation strategy within the next 6 to 11 months has more than doubled from 17% in 2019 to 35% in 2021, a significant increase and a trend that shows no signs of slowing. The future is digital, and the relentless pace towards that reality is epitomised by a revolution in fintech adoption.
From niche to the mainstream
The right supporting technologies makes the the digital expansion among financial organisations possible. And further findings from Visma | Onguard are indicative of their increased uptake. In the context of artificial intelligence (AI), almost half of organisations (47%) recognised this as one of the top three technology trends to impact the sector. A steep rise from just under a third (31%) in 2018.
More organisations are utilising AI-powered solutions to minimise operating expenses. And more, to unlock revenue growth opportunities, as the technology is refined over time.. And importantly automate manually intensive processes. This is allowing more professionals to free up time and devote more resources to value-adding tasks in their working day.
Alongside this growth in supporting technologies is the increased requirement to effectively analyse data. This need rose from just over a third (37%) to almost half (44%) in 2021. This is also driven by the fact that data is now playing a much more prominent role in organisational strategy. With an increase of 10% of businesses recognising that data supports their processes (up from 28% in 2020 to 38% in 2021).
This increase is of little surprise considering that when utilised correctly, data can help to drive effective insight, steer the organisation forward or confirm an idea or strategy. With supporting technologies such as analytics and AI in place, businesses can wade through a sea of data. Previously that could only provide a broad set of information and break down the key information that’s ultimately linked to business goals.
Looking to the future
A look at the stats from the barometer tells a significant digital story that extends beyond current trends. And an aspect that looks set to shape the next step of the fintech revolution is blockchain. This is where data is distributed across multiple points of authority in a database. And information can be updated across multiple computers in a network. Almost two-thirds (65%) of organisations have either already adopted the technology or worked out the first ideas for future adoption, up from half (51%) in 2018.
When considering how blockchain can be applied to the industry, this is a significant finding. It means that organisations will no longer need to keep separate sets of accounts. And could lead to the end of purchase orders or invoices. This is due to the technology’s existence as a decentralised ledger that can be viewed by anyone. Organisations can set up credit that is repaid by self-executing smart contracts with customers when applied to credit management. This leads to establishing easier and more transparent trade, and providing a foundation for all types of transactions.
In addition to the emergence of supporting technologies, shifting mindsets are also helping to drive significant change within the finance industry. Fewer finance professionals stated in 2021 that they were resistant to change (15%) when compared to 2019 levels (23%). Professionals need to play their part in being open to using new solutions for technology to be adopted. And this looks set to continue over the coming years.
Unprecedented industry shifts
The pressures associated with the pandemic have stifled some industries, but this is not the case for all. Numerous other sectors, such as the finance industry, have seen their digital transformation strategies positively accelerated by the working conditions enforced on them. Undoubtedly, there’s a growing trend towards digitisation, data-driven insights and fintech adoption, with increasing enthusiasm among more businesses to take a step into areas that was previously unknown to them. Now, businesses are undertaking digital transformation initiatives within shorter timeframes than in previous years. Suggesting that it’s rapidly risen up the business agenda. It’s highly likely that this trend will only grow into 2022, and the industry will want to be keeping a keen eye on how this develops over the next four years and beyond.
This was also published by The Fintech Times.