A new study by software development company has revealed that 39 per cent of financial services organisations have not invested in business technology for two years, and 32 per cent are choosing to wait until the end of the recession before they implement new IT.
The research also warns that a lack of IT investment is placing businesses at risk, with 98 per cent of IT managers not convinced that their current IT systems are up to scratch, or capable of supporting the business long-term.
Thomas Coles, managing director of MSM Software, said that while cutting back on IT investment is understandable, it is a dangerous strategy for financial organisations to pursue, as no new wave of improvements can be made.
Mr Coles added: “This in turn leaves them vulnerable to being overtaken by competitors and looking outdated in comparison. The recessionary environment has had an impact on many organisations’ approach to IT investment and I believe this is a major reason why doubt is being cast over the suitability of business technology.”
Mr Coles explained that it is “extremely concerning” that such a vast majority of IT managers believe technology is unfit for the firm.
He continued: “This places financial services organisations at great risk of system failure, which could introduce turmoil into the company, bringing with it huge repercussions in terms of lost sales, custom and damaged reputation.”
Mr Coles said that he urges financial services organisations to re-consider their approach to IT investment: “Firms must have systems in place that are robust and fit for the specific requirements of the company. This is the only way to meet long-term business objectives and ensure competitive advantage both now and when the economic environment improves.”
The research was based on an MSM Software study – Strategic Change in IT. The study consisted of interviews with 100 IT managers of middle manager level and above, in large UK-based organisations with 250 plus employees, to pinpoint their views about the changing nature of IT in their sector.
ADVISER COMMENT
Dan Clayden, founder of Devon-based Clayden Associates, said: “We personally have invested in IT and I think that in terms of advisers these stats would be a little bit surprising. You would have thought that off the back of RDR and providing services in a profitable manner that embracing technology is something that they would look to do. But sometimes when times are hard there is that bunker down mentality, but it is important to look forward. What you might find is that people review their technology and find that they are paying out for things that they don’t actually need. As a small firm is does take time to research and put things into place.”
