Story image

Risk aversion might be the safer path - but it comes with a hefty cost

26 Sep 16

Organisations that are too risk-averse might be stalling their own growth, or at least that's what new research by Marketforce has found.

Marketforce conducted a study across 56 countries on behalf of Pegasystems and Cognizant. The survey found that out of 500 retail financial services and insurance executives, 61% believed their governing board would tolerate a maximum failure rate of 30% of less.

The alarming statistic suggests that a 'safety-first' culture is still alive in organisations, and that innovation could be on a losing battle.

In contrast, 98% of all respondents agreed that they must move outside their comfort zone to encourage innovation, by thinking beyond traditional boundaries and identifying new ways of meeting consumer needs.

“Banks and insurers will have to realise they will need to fail fast and learn quickly if they are to engage with the digital transformation process required to remain competitive,” comments Graham Lloyd, director and industry principal of financial services, Pegasystems.

The disconnect found in the study doesn't bode well for the onslaught of digital disruption, which is all about new and innovative technologies. 50% of survey respondents believe new entrants will be 'massively' or 'significantly' disruptive in the next five years.

“In my opinion, a 50 per cent failure rate should be the absolute minimum that any of these organisations should be willing to accept if they are to cultivate a successful culture of innovation, as anything lower than this signals a lack of commitment to embracing change," says Lloyd.

Respondents also believed that the Internet of Things and blockchain will also have disruptive effects within the same timeframe.

"Senior figures within these businesses must take the time to walk in their customers’ shoes and see innovation failures less in terms of cost and more in terms of learnings and savings. Only by opening themselves up to the innovation imperative – along with the associated risks – can the industry avoid being left behind by the new age of digital disruption," Lloyd concludes.

Dimension Data nabs three Cisco partner awards
Cisco announced the awards, including APJ Partner of the Year, at a global awards reception during its annual partner conference.
WatchGuard’s eight (terrifying) 2019 security predictions
The next evolution of ransomware, escalating nation-state attacks, biometric hacking, Wi-Fi protocol security, and Die Hard fiction becomes reality.
Why the adoption of SAP is growing among SMEs
Small and medium scale enterprises are emerging as lucrative end users for SAP.
Exclusive: How the separation of Amazon and AWS could affect the cloud market
"Amazon Web Services is one of the rare companies that can be a market leader but remain ruthlessly innovative and agile."
HPE extends cloud-based AI tool InfoSight to servers
HPE asserts it is a big deal as the system can drive down operating costs, plug disruptive performance gaps, and free up time to allow IT staff to innovate.
Digital Realty opens new AU data centre – and announces another one
On the day that Digital Realty cut the ribbon for its new Sydney data centre, it revealed that it will soon begin developing another one.
A roadmap to AI project success
Five keys preparation tasks, and eight implementation elements to keep in mind when developing and implementing an AI service.
The future of privacy: What comes after VPNs?
"75% of VPN users said they are seeking a better solution for cloud networks."