Financial services organisations are under increased pressure to transform as more than 72% of their customer interactions are now digital

As digitalisation accelerates, financial services organisations could lose on average $7.6 million by failing to complete digital transformation initiatives

More than a quarter of finance leaders now demand a company-wide API strategy to unlock data and create connected experiences

MuleSoft, provider of the world’s #1 integration and API platform, today reported that 80% of organisations struggle to provide completely connected user experiences across all channels MuleSoft’s 2022 Connectivity Benchmark Report, released today, shows that this comes at a time when almost three-quarters (72%) of financial services organisations' customer interactions are now digital. Yet, as digitalisation accelerates, organisations could lose on average $7.6 million ($7,647,629) in revenue if they fail to successfully complete digital transformation initiatives.

To grow in today's competitive environment, financial services organisations need to deliver connected digital experiences — for both customers and employees.

“Customer expectations for frictionless digital services are at an all-time high and continuing to rise,” said Jerome Bugnet, Director, Solution Engineering, MuleSoft. “However, it’s clear that financial services organisations are struggling to meet this need. All too often, financial IT is a complicated mix of legacy systems, where valuable customer data is scattered across disparate silos, making it difficult to draw the right customer data sets together to collaborate with others. Financial services organisations need to easily connect apps, data, and devices to automate their business, create seamless digital experiences and drive growth.”

Based on a global survey of 1,050 CIOs and IT decision makers (of which 118 were from the financial services sector), the 2022 Connectivity Benchmark Report highlights the challenges and opportunities for organisations as they look to unlock their data to create and automate seamless experiences:

Customers expect seamless user experiences

Applications lie at the centre of digital transformation and efforts to enhance the user experience. On average, organisations are using 984 individual applications (compared to 901 a year ago). Yet only 29% of these applications are integrated on average, indicating there is still an enormous opportunity to improve connected user experiences in the finance sector. MuleSoft’s report indicates that:

• Creating connected user experiences has become increasingly difficult: More than half (59%) of financial services organisations said they find it difficult to integrate user experiences. This is up from 57% a year ago, showing there is increasing complexity for financial services organisations to meet their customers' digital needs.
• Overcoming security and governance challenges is a hurdle: Data silos (54%) was cited as the biggest challenge to integrating user experiences, ahead of outdated IT infrastructure (51%) and security and governance challenges (49%). 
• Integrating user experience delivers business benefits: Of the organisations that have integrated user experiences, more than half said it had increased customer engagement (56%) and enhanced visibility into operations (55%). Other benefits realised included innovation (53%), improved ROI (50%), faster delivery of projects to customers (46%) and increased automation adoption (41%).

Integration challenges hinder digital experiences and initiatives

Data silos remain a significant barrier to creating integrated user experiences, with the number of organisations citing silos as a challenge (92%). The report shows:

• Integration headaches: The biggest challenges to digital transformation are legacy infrastructure and systems (45%), migrating legacy code or applications (43%) and integrating siloed apps and data (41%). 86% of respondents said integration challenges continue to slow digital transformation initiatives.
• Too much is being spent on custom integration: In their efforts to integrate apps and data from across the enterprise, financial services organisations appear to be focusing more resources in the wrong areas, such as custom integration. As a result, they are increasing their technical debt. On average, financial services organisations spent $3.99 million* on custom integration labour in the last 12 months, a 2% increase from last year ($3.90 million ).
• IT budgets are up, but so is demand: 80% of financial services organisations said IT budgets have increased year-on-year (compared to 78% last year). At the same time, the number of projects IT is asked to deliver increased by 38% on average, a big jump from 27% a year ago. Despite the extra budget, IT is finding it difficult to meet the demands of the business. On average, more than half (51%) of projects weren’t delivered on time over the past 12 months. 

Financial services organisations turn to APIs to drive digital transformation and revenue

Despite these integration challenges, the vast majority (96%) of financial services organisations use APIs. By using APIs to connect data and applications, organisations can digitally transform in a more sustainable manner and accelerate business success. The report indicates:

• A top down integration and API strategy: Most (88%) financial services organisations now have a clear integration and API strategy. A quarter (25%) said leaders now demand that all projects abide by a company-wide API integration strategy, up from just 18% a year ago.
• Reuse is on the rise: Financial services organisations are increasingly creating and using reusable IT assets and APIs to create new experiences and accelerate projects, rather than building from scratch each time. On average, 46% of organisations’ internal software assets and components are available for developers to reuse — an increase from 42% a year ago. Nearly half (54%) of financial services organisations said IT is actively reusing these components.
• Empowerment of business users: Enabling non-technical users to harness low-code tools to drive their own automation and digital transformation projects can take huge pressure off IT teams. More than half (54%) of financial services organisations now have a ‘very mature’ or ‘mature’ strategy to empower these users to integrate apps and data sources powered by APIs (compared to 35% last year).
• APIs drive revenue: Just under half (47%) of financial organisations said they have experienced revenue growth as a direct result of leveraging APIs (compared to 27% a year ago). 

“Digital agility is essential to successful transformation, allowing organisations to drive innovation at scale, deliver new initiatives faster, and create the experiences that customers want,” said Kurt Anderson, managing director and API transformation leader, Deloitte Consulting LLP. “A modern strategy that combines integration, API management, and automation is central to achieving digital agility. It enables organisations to easily connect and integrate their data, applications, and devices to create new digital capabilities and drive transformation projects.”

The 2022 Connectivity Benchmark Report is created in collaboration with Deloitte Digital, who together with Mulesoft, can help IT organizations across industries meet the continuously evolving demand to connect data and create transformation opportunities for the business. To read MuleSoft’s full 2022 Connectivity Benchmark Report, download it here.