Revenue, security and cost reduction outweigh sustainability as priorities for CIOs in the US financial services industry Although sustainability ranks low on today’s list of digital transformation concerns, it will gain significant ground by 2024
New York City | September 20, 2022 08:00 AM Eastern Daylight Time
Sustainability lags behind other priorities when it comes to defining digital transformation in the financial services industry today, but organizational urgencies are beginning to change, according to recent research from BT.
Of the 750 US financial service provider CIOs surveyed, only two per cent identified sustainability as a top priority for their digital transformation. Instead, security (nine per cent), cost reduction (seven per cent) and revenue growth (six per cent) are taking precedence during most CIOs’ digital efforts.
Sustainability is growing in significance, though. While just 17 per cent of respondents said they currently have sustainability on their personal performance scorecards, more than half (53 per cent) estimate that sustainability will be included on their personal scorecards within the next year. This number increases to 87 per cent within the next two years.
“As investors and customers demand more environmentally positive action from the organizations with which they engage, sustainability efforts and the need to prove results will become more important,” said Sarwar Khan, digital sustainability lead for BT’s Global unit.
Not only did the survey demonstrate a clear opportunity for improvement on sustainability in the financial sector, its findings come at a time of regulation change within the US financial market. If adopted, the Securities and Exchange Commission’s proposed rule changes on enhanced and standardized climate-related disclosures is sure to have an impact on the industry at large.
“The impending SEC rule changes on sustainability reporting should act like the starter’s gun, triggering a race to make significant and lasting changes in the US financial services industry,” said Khan. “In fact, our research suggests they’re already having an effect. With changes to CIOs’ scorecards imminent, there will be a reshuffling of priorities bringing sustainability to the top. This will be a game changer in how the industry views its environmental impact and holds itself accountable.”
Additional key findings from the research, which was conducted on behalf of BT by Censuswide, include:
- Company size impacts sustainability prioritization. For companies with over 500 employees, 34 per cent of CIOs listed sustainability as a top priority and 30 per cent already have sustainability metrics included on their personal scorecards.
- Sustainability trends differ within different financial services industry sectors. For example, mortgage and brokerage firms ranked much higher than average when it comes to sustainability with over 40 per cent of those surveyed listing it as a top priority. This suggests that providers directly serving consumers are more focused on sustainability, which is increasingly seen as market differentiator.
- 77 per cent of the CIOs surveyed are confident they know the current carbon footprint of their technology infrastructure. This is an important insight as measurement and monitoring will be critical in the pursuit of lowering the financial sector’s environmental impact.
“Sustainability will continue to play a prominent role in future IT infrastructure considerations, and it is not a challenge that can be addressed in isolation,” said Khan. “The right partners, technology and processes will be essential in addressing such a significant task. The time is now to make urgent and lasting changes to meet the needs of investors and clients and to avoid the most critical impacts of climate change.”