Advisors are well aware of the disruptive impact that technology has had and will have on their businesses, such as cloud-based software, big data and the competitive threats posed by online advice providers. However, a new survey shows that leaders of major financial services firms are far more worried about staying compliant and protecting against cybersecurity threats than they are about the impact to their firms of continued technology disruption.
That’s the headline finding of an independent survey of 500 financial services industry decision makers in the U.S. and the U.K. sponsored by Vuealta, which provides cloud-based planning software for enterprises, including asset management firms.
The survey, conducted by the independent research firm Censuswide, asked respondents to rank the issues they believe will be most disruptive to their businesses over the next five years, and how they plan to address those issues.
Their responses as to the biggest issues they’ll face:
- Political changes—39%
- Regulation and compliance—36%
- Data management and privacy—31%
- Planning and uncertainty in the market—20%
- Disruption from technology—16%
The concern about the impact of political change on their businesses was, as you might expect, much more marked among U.K. respondents than among those from the U.S.: 54% of British respondents said they were worried about political change, compared to 24% of American respondents.
In a foreword to a report on the study—The Future of Financial Services—Vuealta CEO Ian Stone writes that ten years after the disruption highlighted by the market freefall of 2008-2009, the financial services industry is “far from settled,” and that the next five years are likely to be “just as dynamic,” though also replete with opportunities for firms that can “navigate the period well.” However, those businesses “hamstrung by siloed and outdated legacy solutions” may not fare as well, Stone warns.
Here’s a related disconnect between what we know about the industry and what those decision makers take too lightly. The study notes that lower barriers to entry have allowed fintech startups to gain financing and industry market share against larger, more established technology providers. However, the survey found that only 11% of respondents saw these fintech startups as causes for concern for their businesses over the next five years.