The report found that 73% of financial services CEOs believe technology is a key enabler to deliver innovation in financial services and 62% believe technology plays a major role in strategic planning. Top innovation projects identified by CEOs include developing new ways of servicing customers, developing new products and developing new internal back-office processes.

Martin Spedding, CEO, DST Bluedoor said, “The changing operational environment and client demands in financial services are driving firms to innovate and implement technology to develop new products and improve customer service.

“Technology innovations such as implementing mobile applications or web portals and improving internal and back-office processes are essential to better communicate with customers and help firms to maintain or lift market share,” Mr Spedding said.

However, despite technology playing a major role in developing innovation within the financial services sector, over half (55%) of Australian CEOs are spending IT budgets on Business As Usual (BUA) projects as they struggle to comply with regulatory changes.

The survey found that over 50% of those interviewed were spending less than 25% of their IT budgets on innovation projects, 31% were spending between 26-50%, and as few as 14% were devoting over 50% to innovation-focused activity.

While many CEOs said they wish they had more resources to direct to innovation projects, nearly three quarters (73%) believe their technology spend represented value for money, and over half thought their IT spend was about right.

“The continuing need for financial services firms to address regulatory requirements is leaving Australian businesses in a difficult position,” Mr Spedding said. “Many CEOs wish they had more resources to direct to innovative projects to ensure future growth and market efficiencies, but ongoing regulatory changes are absorbing crucial IT spend.”

Looking ahead, the survey revealed 75% of CEOs believe the use of client data will improve products, increase customer service and contribute to strategic thinking.

John Brodgen, CEO of the Financial Services Council said: “Consumers are driving new developments in technology which will play an important role in the future of financial services. Technology will be critical for delivering new products and processes and in helping businesses better understand customer behaviours and goals.

“The challenge for financial services will be to keep abreast of customer needs,” Mr Brogden said.

About the Survey

The Financial Services Council conducts an annual survey of its member CEOs on the key issues affecting their businesses, the financial services sector more broadly, and the Australian economy. This year’s survey focused on the place and importance of innovation in meeting Australia’s changing regulatory environment.

This year, 50 of the FSC’s 73 member CEOs participated in the 2014 FSC-DST CEO Survey that captured their views on innovation within the financial services industry and the role the sector plays in supporting innovation. These views are collected via a member survey, a series of roundtables and, one-on-one interviews. The 2014 survey was undertaken in conjunction with DST.

Click here to read the full report.

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