Kyndryl Study: 70% of C-Suite Executives of GCC Financial Services Institutions Shift to a Digital-First Business Model
Kyndryl (NYSE: KD), the world’s largest IT infrastructure services provider, today released a new study conducted by the International Data Corporation (IDC). The study revealed that 70% of surveyed Chief Information Officers (CIOs) within financial institutions in the Gulf Cooperation Council (GCC) countries plan on changing their organizations into a digital business model to ensure future business resilience.
According to the study, the majority are in the process of adopting a digital business model that covers both products and services, along with internal operations. In 2023 and 2024, 67% of GCC CIOs surveyed will prioritize product innovation by creating new products and services or digitizing existing portfolios, while 61% will prioritize operational transformation to achieve efficiencies through cost optimization and process re-engineering.
The study polled CIOs within financial services institutions in Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE), assessing trends that are impacting the sector in the wake of economic diversification led by national vision programs. Today, efforts in the region are being focused on developing a strong digital economy, with particular attention given to the growth of fintech and the overall digital transformation of the financial services sector.
“Every national agenda in the GCC region strives to help organizations across industries to achieve digital maturity in the long run. However, there is a trend of rip and replace that is prevalent in every industry, and the financial services sector is not an exception,” said Andreas Beck, Vice President and Managing Director, Kyndryl Middle East and Africa. “At Kyndryl, our responsibility is to help and support organizations in their transition to adopt a digital-first business model seamlessly, focusing on optimizing their resources and investments for the betterment of their business sustenance.”
Challenges to the digital-first journey
Skills: More than half of CIOs surveyed say they are facing challenges due to a skills gap, which slows the pace of digital-first journeys. Becoming a digital-first organization involves the use of many technologies, such as cloud computing, data analytics, artificial intelligence (AI) and machine learning (ML), blockchain, the Internet of Things (IoT), edge computing and the Metaverse, which makes acquiring and developing skills particularly challenging.
Speed and Scale: The capability to bring about rapid and large-scale transformation sets digital leaders apart. However, nearly half of the surveyed CIOs believe that achieving this is among the most difficult aspects of adopting a digital-first approach. Many financial institutions in the region have only achieved partial digital transformation, limiting it to specific departments or initiatives. For digital maturity to be a competitive differentiator, organizations must advance from isolated pockets of innovation to enterprise-wide efforts.
Legacy Systems: The financial institutions in the GCC region are also hindered by legacy systems. Over one-third of the financial institutions surveyed said the fragmented nature of their IT environment was a key obstacle to their digital-first journey. Instead of using modern, integrated software with advanced features in data analytics and AI/ML, many organizations rely on basic or stand-alone applications to manage their critical tasks.
Strategic IT Capabilities for a Digital-First Enterprise
Fifty-five percent of surveyed CIOs of GCC financial institutions plan to significantly increase investments in cybersecurity, and data and analytics in the next 12 to 18 months, followed by process automation (52%), cloud (48%) and application modernization (39%).
“The financial institutions in GCC are rapidly advancing their digital evolution. As they take a digital-first approach to product innovation and operation transformation, the CIOs need a new playbook,” said Jebin George, Senior Research Manager, Software and Cloud at IDC Middle East and Africa. “To succeed in the digital age, CIOs must prioritize leveraging data as a critical asset, improving their digital trustworthiness, embracing automation and seamlessly integrating into broader ecosystems.”
*Methodology
The study is based on the insights gathered by IDC through a research survey among the CIOs in GCC financial institutions. The survey is part of an annual effort to understand technology trends and digital transformation attitudes among decision-makers. The survey was conducted among CIOs and IT decision-makers in GCC financial institutions and was concluded in January 2023.
