There is a correlation between an FI’s revenues and its digital strategy. A new report from advisory firm EY suggests that the more mature an FI’s digital strategy is, the more revenues it is likely to generate.

According to the report, released late June, 65% of executives believed that their revenues improved thanks to their firm’s digital transformation plans. About 62% of executives believed that customer experience improved thanks to that, and about 60% believed that having such a plan promoted innovation.

At the center of a bank’s digital strategy is a team led by an executive dedicated to this cause. Some banks refer to this executive as a chief innovation officer,  others as a digital strategist, in the case of BBVA Compass, the head of business development oversees this strategy. But regardless, the most digitally advance banks have a budget, team, and executive dedicated to digital transformation, according to the report.

The report is titled Digital Enterprise Transformation: Winning themes of financial service leaders. Read the full version here. 

The study found that the best digital transformation leaders typically organize their strategy around cross-functional, customer-centric structures. When it comes to technology, they use modern software design, development and deployments models to automate processes and legacy systems. The focus is always on automation, speed, agility, and eliminating redundancies, the report stated. At the heart of the strategy is the mindset of using innovation to increase revenues and improve efficiencies.

The report shows that 65% of executives at FIs with designated digital transformation strategies prioritize innovation at the top of their list compared to only 32% of those that are at less digitally advance FIs.

Yang Shim, EY Americas Advisory Data and Analytics Leader for Financial Services, said in a statement emailed to Bank Innovation:

An unrelenting focus on the customer allows companies to innovate while satisfying customer needs and meeting financial criteria like increasing revenues and profitability, plus driving robust, sustainable growth. The performance gap is huge between companies that take a more comprehensive and customer-centric approach to digital enterprise transformation and those that focus solely on cost reduction.

The report also found that among the most digitally advance FIs in the survey, 83% had a strategy of “defined, repeatable and scalable innovation processes.” The less digitally evolved ones had a fragmented approach with no formal coordination or technique to scale any digital efforts.

EY commissioned the study and Forrester Consulting conducted the survey of 250 senior-level executives at banks, insurers, private equity firms, wealth & asset management and capital markets firms around the world.