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Yahoo
19-07-2025
- Business
- Yahoo
The cost of disharmony: Why banks must rethink the money lifecycle
Financial systems today are often anything but harmonious. With rising complexity, cyberthreats and regulatory pressures creating costly disruption, it's perhaps no surprise to hear that money is going astray. Conducted in collaboration with Oxford Economics, our latest report, The Harmony Gap, finds that every single hour, the average organisation loses $11,200 to financial disharmony. Annually, this figure reaches $98.5m. Large banks (those with more than $20bn of AUM) report an average of $124m in annual losses because of tensions within their money lifecycle. The question is, why, and how? The money lifecycle To answer this, we must first and foremost understand the lifecycle's three key phases. These are: Money at Rest, which covers deposits and treasury accounts; Money in Motion, covering payments and transfers; and Money at Work, which is trading, lending, investing and capital deployment. While all three phases face challenges, the money in motion stage is where the majority of problems surface. Specifically, our research finds that 51% of financial friction occurs here, due to the complexity of multi-party transactions, cross-border payments, legacy infrastructure and inconsistent data standards. This friction opens the door to a number of vulnerabilities, with the most significant - and costly - being cybersecurity threats. 35% of executives surveyed ranked this their top concern, with $31.7m in annual losses attributed to cyberattacks alone. Other major pain points include financial fraud, whereby $21.6m is lost annually, particularly affecting the tech and fintech sectors. A further $17.2m of combined losses were a direct result of operational inefficiencies and human error, posing a concern for internal training and compliance processes. All this being said, banks have an integral role to play in not just recovering costs but ensuring the safety of money throughout the entire lifecycle, whether that is through infrastructure or fraud protection. Banks owe it to their customers to not only safeguard the money lifecycle but modernise it for the future. Solving the disharmony dilemma Banks must take some bold and structural steps to solve the disharmony that exists within modern banking architecture. To create harmony across the money lifecycle - every system, platform and decision needs to be connected, intelligent and secure. This demands strategic investment in four key areas. First, banks must prioritise cybersecurity defence. Our research shows 37% of companies experience cyberthreats daily, and 74% face critical or high-profile threats on a monthly basis. Unsurprisingly, nearly a quarter (24%) already identify cybersecurity enhancement as their top investment focus. However, while there is concern over this technological hurdle, only 53% of companies offer regular cybersecurity training. If banks want to protect customers from cyberthreats we need to see meaningful cyber resilience built into every layer of the banking architecture. Secondly, we need to see improved operational efficiency. One in five institutions already list this as a core priority, recognising that streamlined processes can reduce costs, enhance compliance and enable faster responses to customer needs. But we are still waiting to see true action. As we head into the future, the banks that invest in tech for efficiency will build the most effective operations. This is evidenced by respondents from firms with dedicated fintech teams reporting higher sales growth than those without, with 83% of these companies seeing revenue increases after embedding fintech solutions. The third key ingredient to a harmonious money lifecycle for banks is employee training and upskilling. It is all well and good to be investing in and implementing new technologies, but these will sink if there is no one around to steer the ship. A skilled, resilient workforce is critical for long-term success, ensuring that digital transformation is embedded throughout the organisation, not just in the IT department. Finally, banks should embrace AI and machine learning - not as a silver bullet, but as powerful tools to enhance decision-making and enable smart automation that complements, rather than replaces, human workers. Despite the hype surrounding AI, 73% of respondents cited high implementation and maintenance costs as major obstacles to adoption. Additionally, 64% pointed to a lack of in-house expertise, while 58% struggled with integrating AI into existing systems. To succeed, banks must invest in the right talent and infrastructure to fully realise AI's potential. When banks achieve true harmony across these four areas, they reduce risk, improve agility, accelerate innovation and unlock sustainable competitive advantage. Looking ahead With $98.5m in annual losses at stake (and more for larger institutions), the price of inaction far outweighs the cost of change. But this isn't just a financial issue. Disharmony drags on innovation, slows down agility, and erodes customer trust. Banks that move now to close the harmony gap through rethinking how money flows, investing strategically, and focusing on integration and intelligence will be better equipped to lead in a world defined by embedded finance, AI-powered insights, and real-time expectations. The opportunity is clear: Rethink the lifecycle. Invest smartly. Build a more secure, connected, and harmonious financial future. Kanv Pandit is Head of International Banking and Payments Sales at FIS "The cost of disharmony: Why banks must rethink the money lifecycle" was originally created and published by Retail Banker International, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Errore nel recupero dei dati Effettua l'accesso per consultare il tuo portafoglio Errore nel recupero dei dati Errore nel recupero dei dati Errore nel recupero dei dati Errore nel recupero dei dati
Yahoo
10-04-2025
- Business
- Yahoo
New Research by FIS and Oxford Economics Finds That Cyberthreats, Fraud, Regulatory Complexities and Financial Inefficiencies Cost Businesses $100 Million Annually
Key facts: Landmark research of more than 1,000 business leaders across six industries quantifies impact of disruptions and inefficiencies across the money lifecycle. Primary sources of disharmony include cyberthreats, fraud and regulatory complexities. Businesses are losing an average of $98.5 million per year due to this disharmony. Forward-looking businesses are realizing a tangible ROI by addressing these issues with modern solutions like embedded finance. JACKSONVILLE, Fla., April 10, 2025--(BUSINESS WIRE)--Businesses are losing out on an average of $98.5 million a year as a consequence of cyberthreats, fraud, regulatory hurdles and operational inefficiencies, according to landmark new research from global financial technology leader FIS® (NYSE: FIS) in collaboration with Oxford Economics. In two global surveys of a combined 1,000 C-suite business and technology leaders across six different industries, FIS has quantified the true impact of financial, operational and technological disharmony, defined as disruptions and inefficiencies across the money lifecycle, on firms in the U.S., the U.K. and Singapore. "The Harmony Gap: Finding the Financial Upside in Uncertainty" study revealed nine sources of disharmony, the top sources of which include: 88% of respondents identified cyberthreats 79% identified fraud 65% identified regulatory complexities Other tensions identified were operational inefficiencies, payment friction, human errors, illiquidity, financial technology skills gaps, and reputational damage. The survey results also shined a light on the specific financial technologies that forward-looking organizations are employing to address disharmony in their operations. Over four-fifths (82%) of surveyed leaders said they have implemented embedded finance solutions, realizing an average 8.5% growth in sales through these investments. Stephanie Ferris, CEO and president of FIS, said, "We commissioned this research to determine the sources of disruption and inefficiencies within organizations' financial ecosystems, whether money is at rest, in motion or at work. The findings uncover the profound consequences of disharmony in the money lifecycle, and our goal in sharing this research is to empower businesses to overcome these challenges and identify opportunities to create value amidst rising economic uncertainty. By ensuring their financial systems and processes are in harmony, companies can unlock the extra capital and capacity needed to invest in innovation and competitive advantage." Initial findings from the research included: Money in (Slow) Motion Moving funds seamlessly from point A to B is a critical function of nearly every business. Yet, "The Harmony Gap" survey highlighted key points of friction within respondents' payments systems and processes. 51% of those surveyed said their business faces greater tension when money is in motion, including when moving money through payments systems, credit and debit accounts, and card networks, than during other phases of the money lifecycle. While 79% of respondents said their business has adopted automated payment processing technology, 57% reported experiencing transaction delays at least once a month. Businesses Under Siege From Cyberattacks and Fraud The survey respondents identified cybersecurity and fraud as the two most costly sources of friction and tension across the money lifecycle. More than one-third (37%) of respondents said their company experiences cyberthreats daily, and 74% face critical or high-profile threats on a monthly basis. 83% of the respondents surveyed said their firm prioritizes fraud risk management. Yet, 53% said they are unhappy with their fraud response plans. 41% of respondents reported being dissatisfied with their basic software tools for fraud detection and prevention methods. 47% of those surveyed said their company does not regularly train employees on fraud and cyberawareness, leaving these firms more vulnerable. Insurance firms buck the trend: 75% of the respondents from insurance companies reported that their firm relies on employee training for fraud prevention, compared to 48% of respondents from all sectors surveyed. Fintech Strategy Is Key to Growth The survey data underscores that a strategic approach to technology that advances financial transactions is critical for organizations seeking to address disharmony and achieve growth. Respondents from companies with teams dedicated to implementing and managing financial technology – whether in-house or outsourced – reported greater preparedness to tackle key challenges. 85% of leaders surveyed from organizations with dedicated fintech teams reported feeling moderately or very well-equipped to address frictions including inefficiencies, cyberrisks, and compliance failures. Respondents from firms with dedicated fintech teams reported higher sales growth than those without, with 83% of these companies seeing revenue increases after embedding fintech solutions. In contrast, the research identified the insurance industry as lagging in fintech adoption, with only 52% of leaders surveyed from investment companies reporting that they have a fintech team, compared to 74% of respondents across all industries surveyed. Firdaus Bhathena, chief technology officer of FIS, said: "The findings highlight that a well-defined technology strategy, supported by a dedicated and knowledgeable team, is a fundamental component of a firm's success. Companies that invest in building or partnering with fintech expertise are better positioned to optimize their financial operations, mitigate risks and ultimately achieve the financial harmony that drives sustainable growth." Unlocking AI and Automation Potential A notable trend among the executives and business leaders surveyed was the significant investments their organizations are making in AI and automation technologies. Over half (55%) of respondents reported that their companies are investing in innovative solutions such as generative AI and machine learning to meet their strategic objectives. However, 73% cited the high cost of implementation and maintenance as an obstacle to their firm's adoption of AI and automation, as well as struggling with a lack of in-house expertise (64%) and the difficulty of integration with existing systems (58%). Showing signs of optimism despite these obstacles, 56% of respondents said their companies plan to employ AI to increase their organization's agility in response to market dynamics, while 48% anticipated it would enable them to gain new customers. "This groundbreaking research has quantified the impact of tensions within the money lifecycle," Bianca Fisher, research manager at Oxford Economics, said. "This unique analysis has allowed us to identify the cost of financial disharmony and how it can hinder organizational growth and innovation. By working with FIS, we've delivered insights that will help businesses globally understand and address these challenges, leveraging emerging technology solutions like AI and automation to enhance efficiency, security, compliance and strategic decision-making." A preview of "The Harmony Gap" study findings can be found here. FIS plans to release the full survey results ahead of its annual Emerald conference in May. About the Research In partnership with FIS, Oxford Economics conducted two separate surveys, each involving 501 C-suite executives and business leaders at organizations directly involved in financial technology decision-making in the U.S., the U.K., and Singapore, spanning the financial services, technology, fintech, insurance, government and other sectors. A pulse survey was conducted in October and November 2024 to identify tensions – "disharmony" – stemming from issues such as fraud, cyberthreats, human errors, operational inefficiencies, and regulatory complexities, while also exploring the potential growth opportunities these challenges might present. The second survey, conducted in November and December 2024, collected detailed insights into how organizations are implementing strategies to mitigate disharmony. Data for both surveys was collected using computer-assisted telephone interviewing (CATI) and online methodologies. About FIS FIS is a financial technology company providing solutions to financial institutions, businesses, and developers. We unlock financial technology to the world across the money lifecycle underpinning the world's financial system. Our people are dedicated to advancing the way the world pays, banks and invests, by helping our clients to confidently run, grow, and protect their businesses. Our expertise comes from decades of experience helping financial institutions and businesses of all sizes adapt to meet the needs of their customers by harnessing where reliability meets innovation in financial technology. Headquartered in Jacksonville, Florida, FIS is a member of the Fortune 500® and the Standard & Poor's 500® Index. To learn more, visit Follow FIS on LinkedIn, Facebook and X. View source version on Contacts Kim Snider, 904.438.6278Senior Vice PresidentFIS Global Marketing and Sign in to access your portfolio
