- The financial services industry has so far realised greater benefits from its digitisation efforts
- Healthcare has a long way to go before the sector can fully realise the benefits of digital technology
MORE of us are going digital to take control of our health and finances – from tracking daily physical activities and food intake to online banking and mortgage calculators. This consumer demand, combined with the operational and competitive changes businesses are going through because of new technologies, is creating huge opportunities – and challenges – for established financial services and healthcare companies.
Interestingly, these two industries are responding to this consumer demand and market dynamics in different ways.
The financial services and healthcare sectors have a lot in common – they provide vital services, they are highly regulated, and they are subject to heightened scrutiny when it comes to privacy and customer data security.
However, when it comes to efforts to transform their businesses to compete in the digital era – these two industries are on different paths in the Asia-Pacific region.
Recent research commissioned by Telstra and conducted by the Economist Intelligence Unit (EIU) looked into 11 countries in the Asia-Pacific region to see how they are best positioned when it comes to having the necessary building blocks in place for business success in a connected world.
Titled Connecting Capabilities: The Asian Digital Transformation Index, the survey also compared six different industries when it comes to their approach to digital transformation – financial services, healthcare, logistics, media, manufacturing, and professional services.
Across all countries, the financial services industry leads the way when it comes to being committed to driving and embracing change through digital transformation, while healthcare organisations were the least likely to see the benefits of digital transformation.
Here are some key insights from the report that explain why:
A leader versus follower
Almost a third of financial services organisations consider themselves responsible for digital transformation – the highest of any industry. This compares with around 18% in healthcare. See table below.
In part, this mentality has been forced on the financial sector thanks to the success of fintech disrupters, new technology led companies that are now competing with incumbent financial services companies in areas like e-commerce, services marketplaces and blockchain.
It may also reflect the finance industry’s adaptability to changing their business models, which might also explain why they are more accepting of digital transformation. About 83% of executives in the financial services industry mentioned that their firm’s digital transformation efforts have led to changes in their business model. See table below.
Differing views on the benefits of digital transformation
Overall, the financial services industry has more positive views on the benefits digital transformation can deliver for their business, with nearly 74% of survey respondents saying that investments in digital transformation have already proven their value. See table below.
The two biggest benefits cited by financial services companies were that digital transformation would help expand companies’ reach into new markets (50%), as well as deliver more innovative ideas for new products and services (42%).
In comparison, the healthcare industry is more focused on making what they do today more efficient, with organisations in health citing greater cost savings and productivity improvements as the top two benefits they were seeking from technology.
Customers are using online channels to buy products, access services and interact with businesses more often when it comes to financial services than they are with healthcare.
Sixty-four percent of financial services companies in the Asia-Pacific region deliver their services online compared to less than half of healthcare organisations, while half as many healthcare organisations interact with customers via live chat compared to the financial services sector.
Varying degrees of success from previous transformation efforts
The healthcare industry’s results may well be the result of previous digitisation efforts not meeting expectations. Transformational change in a sector as complex and sensitive as healthcare is always difficult and one third of healthcare organisations interviewed said their investments in digital transformation have not yet proven their value – the lowest of all industries.
In short, each industry will experience digital disruption differently depending on the type of services they provide, the way consumers use their products and the rules and regulations that apply.
The financial services industry has so far realised greater benefits from its digitisation efforts.
This does not mean the health sector is not pursing change – efforts to digitise healthcare are well underway, but there is still a long way to go before the sector can fully realise the benefits of digital technology to the same extent as other industries, including financial services.
Read more about the Connecting Capabilities: The Asian Digital Transformation report.
Matthew Lempriere is the global head of Financial Services Market Segment at Telstra.
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