The financial industry's appetite for pooled Utility models clearly exists. What are the drivers for growing their uptake? Where are the obstacles? What, today, do financial institutions see as most useful from Utilities? And what should they look to achieve with the Utility model tomorrow? The results of the latest global survey by Capco and Finextra offer fresh insight.
In 2015, Capco, in association with Finextra, carried out a global survey of a wide range of financial institutions. The objective was to explore attitudes toward the Utility models that already succeed in other industries. We wanted to know why and where Utility models have been useful. We wanted to discover where the application of a Utilities model is still perceived as off-limits. And we wanted to estimate how the Utilities approach must evolve in order to drive increased uptake among banks. In short, our objective was to answer two fundamental questions about Utilities in the financial industry: where do they fit, and how far can they go?
Our experience suggested some ”pre-conclusions” about Utilities uptake:
Key barriers include cultural and organisational issues within banks.
Lack of standardization and fragmented/complex processes block uptake.
Banks have ongoing concerns around data security and related issues.
We wanted a snapshot of how the financial industry currently identifies operational elements suitable for a Utilities model, of what value they may already derive from the model and the nature of any obstacles preventing Utilities adoption.
We gathered a statistically significant response from 69 financial institutions distributed across 26 countries and representing a spread of global, international and regional financial institutions. The respondents ranged from C-suite to specific operational areas, including CTOs, COOs and specialist Operational Heads, among them treasury, IT, payments and digital.
This summary focuses on the following areas of questioning:
How complex is your business today?
What savings do you expect from the Utilities model?
What are the operational key drivers toward Utilities adoption?
How far have you gone toward applying the Utilities approach, in named key areas?
What are the strategic drivers for Utility model uptake across the industry?
What is preventing you from moving closer to a Utilities approach?
The responses contribute to a deeper understanding of where institutions are today – in relation to the key issues surrounding Utilities uptake – and of the factors that will shape their future decisions.