Dec 22, 2018

BearingPoint Digital Leaders Study 2019: EON triumphs but energy sector must catch up

Olivia Minnock
1 min
EON, EDF, First Utility, Npower and Octopus are the most digitally enabled companies in the sector according to BearingPoint.
A new study published by management and technology consultancy BearingPoint has analysed 593 companies across eight countries, span...

A new study published by management and technology consultancy BearingPoint has analysed 593 companies across eight countries, spanning various industry sectors, to reveal digital maturity of leading companies.

EON, EDF, First Utility, Npower and Octopus Energy were ranked as the most digitally enabled companies in the energy sector. However, no energy companies were listed among the top 10 digitally enabled companies in the UK, which mainly consisted of retailers such as Amazon, ASOS and Tesco.

 

See also:

Capgemini energy markets report: digital transformation will be key

Britvic’s Healthier Everyday sustainability plan ramps up with E.ON deal

Wells Fargo’s IN2 incubator: a global sustainability journey

 

BearingPoint noted that the energy sector scored low in digital marketing, and that more customers would be obtained and retained if businesses engaged through digital channels.

Overall in the report, Energy was the seventh most digitally enabled sector, following telecom, retail, banking, automotive, insurance and logistics.

Nichol Weatherston, Director, BearingPoint said: “While traditional custom in the energy industry is maintained through physical channels such as postal or telephone engagements, there is a rapidly growing aspect of this sector that encourages online interaction.”

He added: “With an increased digital focus, energy companies could offer customers enhanced incentives not to switch.”

 

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Jun 12, 2021

'Doing digitalisation wrong and risk being left behind'

Technology
SAP
banks
Data
Gero Decker
3 min
In a world which continues to embrace digitisation, where do legacy banks stand? Firmly set in brick and mortar, resisting change, says Gero Decker

Research has shown that 55% of bank executives view non-traditional players as a threat to traditional banks. The fear is justified, as digital banks could have a cost base approximately 60-70% lower than theirs. If this looming threat from innovative and digital-minded industry disruptors has not been enough to trigger a digital rebirth of legacy financial institutions, surely the biggest disruptor of them all – the pandemic – would force change? 

It seems that despite studies showing COVID-19's long-lasting effects on the global economy to be of the likes of a substantial one-year reduction in worldwide GDP of more than 6%, the necessity of cost-cutting in 2021 is still not a stake high enough to steer legacy financial service CFOs in the same digital direction that the world is heading to.

Modern living now operates online, both professionally and personally. Distributed working, retail, and socialising are all the ‘new normal’, and the financial services sector is no different; the pandemic has resulted in 71% of global consumers now using digital-banking channels weekly – with contactless and digital payments at the forefront of this shift.

Due to this demand, many banks are experiencing a 50% increase in the use of their digital services. Research has shown that accelerated consumer adoption of digital banking tools has led to the growth of new digital banking users by approximately 20% over the last year alone. The decision-makers at legacy banks now have a choice to make: understand and adapt to the modern consumer’s needs and lifestyle or watch them leave. 

This is different from the threat legacy banks saw in the 1990s with the rise in internet banking or even the financial crisis of 2008. Consumers now have a plethora of options available to them with a click of a touchscreen button in the palm of their hands. In order to remain a noticeable competitor in the industry, legacy financial institutions will have to cut costs by 25-50% in the next 3-5 years, which simply won’t happen. A lot needs to change.

Transformation in various forms

This transformation can materialise in various forms, from introducing operational efficiencies and superior customer experience by leveraging AI, modernising legacy systems and processes to allow for cloud-native end-to-end experiences, to building digital onboarding, quick loan disbursements, and real-time payments. With studies finding that firms could digitise many activities 20-25 times faster than previously thought possible, it’s a convenience simply waiting to happen. 

It would be wrong to imply that all legacy financial institutions have not thought about accelerating their digitisation. Research has shown that 45% of banking executives are keen on transforming their existing business models into digital ecosystems right now. So, if sentiment and plans to pivot are beginning to take shape, where are legacy banks going wrong and why are changes not being made?

It’s simple. They have their priorities all wrong. Data looking at the top banking priorities for post-pandemic FS shows the three lowest priorities mentioned are instrumental to achieving digital transformation success: innovation, operational excellence, and culture development. This lack of focus on technology, operations and culture will ultimately derail most digital banking transformation efforts, rendering these legacy banks obsolete. 

Changes need to be made for these institutions to stand a chance of surviving against their disruptor counterparts. As Jack McCullogh, founder of the CFO Leadership Council, astutely said: “Few, if any, investments can give an organization a sustainable competitive advantage like an investment in technology”.

In every crisis there is an opportunity, and the pandemic is a perfect time for legacy banking to reassert themselves as a viable option for consumers and as noticeable competition in the industry. The world has been forced into digital, and these legacy firms are no exception. It is now or never.

 

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