# Financial services firms unable to innovate as technologists lack boardroom influence, warn IT leaders in new report
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2017-11-17
Category: TECHNOLOGY
Category URL: https://financedigest.com/category/technology
Meta Title: Report: IT Executives Frustrated by C-Suite Misunderstanding
Meta Description: Find out why 78% of IT leaders think senior executives don't understand technology and how 86% have failed on major digital projects due to boardroom
Tags: featured
Tag URLs: featured (https://financedigest.com/tag/featured)
URL: https://financedigest.com/financial-services-firms-unable-to-innovate-as-technologists-lack-boardroom-influence-warn-it-leaders-in-new-reporthtml

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- _78% of IT leaders believe senior [executives](https://www.financedigest.com/sustainability-takes-back-seat-in-auto-industry-sourcing-decisions-survey.html) do not understand technology and 81% are frustrated by unrealistic C-suite expectations_
- _86% have recently failed to get traction on a major digital project_

[Technology](https://www.financedigest.com/kelda-technology-pushes-ahead-with-global-growth-plans-afternew-appointment.html) departments in [financial](https://www.financedigest.com/financial-literacy-what-is-financial-literacy-and-why-is-it-important.html) services firms are unable to innovate with technologies like Artificial Intelligence and Blockchain because they have lost influence in boardrooms, according to leading Information Technology (IT) executives working in the financial sector.

A survey of over 200 European IT decision makers commissioned by Excelian, Luxoft [Financial Services](https://www.financedigest.com/can-financial-services-brands-ever-be-credible-on-social.html "Can financial services brands ever be credible on social? ") reveals that 86% of [respondents](https://www.financedigest.com/42-of-retailers-say-payment-over-time-solutions-are-very-important-to-ensuring-future-digital-innovation.html) have recently championed a major digital project that failed because it did not get past the boardroom. IT executives believe misconceptions about [technology](https://www.financedigest.com/kelda-technology-pushes-ahead-with-global-growth-plans-afternew-appointment.html) by [executives](https://www.financedigest.com/sustainability-takes-back-seat-in-auto-industry-sourcing-decisions-survey.html) are partly to blame for these failures – 78% agree that senior executives do not understand technology and 81% are frustrated by unrealistic demands to innovate with new technologies whilst also having to [cut costs](https://www.financedigest.com/hm-to-cut-costs-as-profits-hit-by-inflation-cautious-shoppers.html "H&M to cut costs as profits hit by inflation, cautious shoppers").

_Excelian, Luxoft Financial Services_ – the financial services division of [Luxoft](https://www.luxoft.com/), a global consultancy and IT service provider – today published **Confessions of a CIO,** a report which reveals the biggest frustrations of IT executives working in capital markets, wealth management and corporate banking in the UK, Germany, Austria and Switzerland.

The report shows IT [executives](https://www.financedigest.com/sustainability-takes-back-seat-in-auto-industry-sourcing-decisions-survey.html) working in the UK are [particularly frustrated by senior colleagues being unable to grasp new technologies](https://www.financedigest.com/increasing-private-and-public-investment-in-digital-imaging-technology-particularly-in-the-field-of-healthcare.html "Increasing private and public investment in digital imaging technology particularly in the field of healthcare") – 85% of respondents in the UK agree that senior executives do not understand technology well enough, compared to 76% in Germany, 75% in Austria and 87% in Switzerland.

With a lack of understanding of technology, comes unrealistic [expectations about how it should be implemented](https://www.financedigest.com/u-n-expects-ukraine-russia-grain-deal-to-be-implemented-in-a-few-weeks-officials.html "U.N. expects Ukraine-Russia grain deal to be implemented in a few weeks -officials"). 81% of respondents are frustrated by unrealistic expectations from the C-suite, with 22% going further by saying a lack of support from [senior executives](https://www.financedigest.com/musk-warns-of-twitter-bankruptcy-as-more-senior-executives-quit.html "Musk warns of Twitter bankruptcy as more senior executives quit") keeps them awake at night. As such, IT professionals are not being given the tools they need to innovate and some [financial](https://www.financedigest.com/financial-literacy-what-is-financial-literacy-and-why-is-it-important.html) institutions are being left behind in the [digital revolution](https://www.financedigest.com/the-fintech-digital-revolution-will-continue-in-2022.html "The Fintech Digital Revolution Will Continue in 2022") by faster acting competitors.

“ _Tensions in [financial](https://www.financedigest.com/financial-literacy-what-is-financial-literacy-and-why-is-it-important.html) services IT departments are reaching boiling point_,” said **Roman Trakhtenberg, Group Managing Director and Global Head of Excelian, Luxoft Financial Services** **.**“Technologists in [finance want to be the gateway to the innovation](https://www.financedigest.com/innovations-in-finance.html "Innovations in finance") but right now they are unable to influence decisions at the top. Instead, IT professionals in [finance are stuck dealing](https://www.financedigest.com/citi-halted-financing-for-trafiguras-nickel-deals-in-october-bloomberg.html "Citi halted financing for Trafigura’s nickel deals in October – Bloomberg") with internal legacy systems and imminent cyber-risks, and are not getting the support they need to implement real change.”

The report also shows that although [top executives want the company](https://www.financedigest.com/immunology-drug-market-growth-by-top-companies-trends-by-types-and-application-forecast-analysis-to-2030.html "Immunology Drug Market Growth by Top Companies, Trends by Types and Application, Forecast Analysis to 2030") to innovate with technology and most understand its importance to the business, IT departments remain underfunded. 85% of respondents [say that the CEO understands the importance of technology within the business, but 78% are frustrated by a lack of IT investment – 31% also say budget cuts](https://www.financedigest.com/amazon-will-not-cut-jobs-in-italy-unions-say-after-meeting.html "Amazon will not cut jobs in Italy, unions say after meeting") keep them awake at night. UK based respondents [working for small to medium sized financial](https://www.financedigest.com/turning-a-blind-eye-wont-work-for-financial-firms-as-the-fca-tightens-its-grip.html "TURNING A BLIND EYE WON’T WORK FOR FINANCIAL FIRMS AS THE FCA TIGHTENS ITS GRIP") institutions were particularly frustrated, with nearly all (97%) agreeing they needed more investment – whereas only 76% of UK respondents working for larger firms expressed the same frustrations.

The case for increased IT investment at banks in Europe was recently strengthened in September as the [European Commission announced it is looking at ways to treat expenditure on IT systems as a cost rather than investment](https://uk.reuters.com/article/us-eu-banks-fintech/fintech-pushes-eu-to-explore-changes-to-bank-software-rules-idUKKCN1BG26C) – meaning IT spend may no longer be deducted from banks’ capital ratios when calculating capital requirements, which may free up additional budget. This could be a particularly important EU initiative as 75% of respondents [today are frustrated that technology](https://www.financedigest.com/financial-firms-can-use-technology-combat-todays-cybercriminals.html "How financial firms can use technology to combat today’s cybercriminals") is treated as a commodity by the business, meaning they believe financial institutions do not take into account the future value of [technology](https://www.financedigest.com/kelda-technology-pushes-ahead-with-global-growth-plans-afternew-appointment.html) and see it only as a cost when looking at their balance sheet.

Despite this, Confessions of a CIO shows that mounting pressures on IT departments, including [cost saving](https://www.financedigest.com/how-to-save-money-as-a-student-during-the-cost-of-living-crisis.html "How to Save Money as a Student During the Cost of Living Crisis") initiatives since the financial crash, mean IT leaders have lost the ability to innovate. IT [executives](https://www.financedigest.com/sustainability-takes-back-seat-in-auto-industry-sourcing-decisions-survey.html) are unsure about how to encourage more innovation, but 41% believe a change in their businesses culture is needed in order to embrace [digital innovation](https://www.financedigest.com/the-digital-pathology-systems-market-to-get-digitally-innovative.html "The Digital Pathology Systems Market to get digitally innovative"). Half of German-based respondents say their [business needs](https://www.financedigest.com/no-collateral-no-problem-here-is-what-you-need-to-know-to-secure-a-business-loan.html "No Collateral, No Problem: Here is What You Need to Know to Secure a Business Loan") a cultural change – only 43% of Swiss-based respondents, 37% of UK-based respondents and 35% of Austrian-based respondents agree.

“ _It is harder than ever working as an IT executive in a financial institution_,” explained **Roman Trakhtenberg**. “ _They are underfunded, underappreciated and are often not taken seriously by their non-technical senior colleagues. CIOs and technology leaders need to strengthen their hand in the industry if we are to finally propel the financial sector into the [digital](https://www.financedigest.com/constructive-digitization-to-let-the-tissue-diagnostic-market-come-of-age.html "Constructive digitization to let the Tissue Diagnostic Market come of age") age.”_


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