Financial services institutions must focus on IT
innovation for radical change or hibernate to survive the economic
downturn, says analystGartner.
Organisations that choose the middle ground risk wasting their
IT budget on incremental modernisation for little gain, said the
analyst.
"Far from being fast followers, companies in between the two
options will be ditherers or laggards who waste their IT budget on
incremental modernisation, which will have little or no consequence
for their business," said Alistair Newton, a Gartner analyst.
Newton provided an outlook on how financial services
organisations can innovate during the Gartner Symposium/ITxpo 2008
in Cannes this week.
Gartner said that organisations that hibernate are making a
conscious decision to prepare for survival by avoiding IT change
until absolutely necessary.
They take a short- to medium-term approach, keeping their
systems running for the absolute minimum cost while building up a
war-chest of savings for later use on smart, innovative activities
as and when market conditions improve.
Gartner defines companies that innovate as being at the leading
edge of technology and they embrace the big bang approach. They
develop accurate cost-benefit models that link IT changes to
business metrics so that they can quantify benefits and justify the
radical transformations they encourage.
Newton said, "Financial services companies need to continually
assess the external market, especially in today's current turbulent
situation. Many new competitors - including non-banks looking to
enter the financial services market - see the confusion and
uncertainty generated by the current problems as the ideal
opportunity to attack the banks and steal their customers.
"Banks need to be aware of this threat and adopt the appropriate
response, taking into account their own capabilities and desires to
defend their customers from acquisitive aggressors," he said.