US banking institutions should be driving for agility to keep profits up, according to a new CFO outlook report from management solutions company Syntellis.
According to the report, 84% of institutions need to do more to leverage operational and financial data to inform strategic decisions, while more than a third remain hindered by overreliance on outdated methods of budgeting.
These findings come amid a period of technological transformation across the industry which, the report found, financial executives expect will continue, with 42% of senior banking executives anticipating use of predictive analysis will increase, and 30% expecting use of artificial intelligence (AI) to scale.
“As we move through the ongoing Covid-19 pandemic, flexibility and agility have taken center stage in navigating an uncertain landscape,” said Flint Brenton, CEO of Syntellis.
“After facing significant challenges in the past two years, financial institutions remain resilient and have embraced nimble planning and quick adjustments to remain profitable. We expect to see more of these changes as institutions leverage new technology to improve budgeting, forecasting, reporting, and scenario analysis,” he added.
Despite the trend, 59% of bank and credit unions acknowledged their data gathering was insufficient and hindered business decisions.
Over a third of respondents said they relied on spreadsheets as the primary means for incentive compensation, for example.
The report also found that the ripple effects of the pandemic had led to prolonged budget cycles, with 43% of respondents reporting budgeting takes more than 12 months to complete, compared to 14% in 2020.
Last month, banking software firm Temenos revealed that seven out of 10 banking software executives said incorporating cloud technology into products was helping them achieve their business priorities.
Stuart Tarmy, global director, financial services industry solutions at Aerospike, said there were four main data strategies banks needed to consider in order to thrive in a digital environment: use of multiple data centers, ensuring data consistency, harnessing edge technology and utilizing AI-powered data analysis to fight fraud.