Financial institutions must focus on IT innovation to weather economic downturn: Gartner

04 November 2008

Financial services institutions must focus on IT innovation for radical change or hibernate to minimise cost and prepare for later action to survive the economic downturn, says market research firm Gartner, Inc.

It warned that organisations that choose the middle ground risk wasting their IT budget on incremental modernisation for little gain.  

''Far from being fast followers, companies in-between the two options will be ditherers or laggards who waste their IT budget on incremental modernisation, which will have little or no consequence for their business,'' said Alistair Newton, research vice president at Gartner.

Mr Newton provided an outlook on how financial services organisations can innovate during Gartner Symposium/ITxpo 2008, which is taking place in Cannes through November 3-7.

Organisations that hibernate are making a conscious decision to prepare for survival by avoiding IT change until absolutely necessary. They take a short- to medium-term approach, keeping their systems running for the absolute minimum cost while building up a war-chest of savings for later use on , smart, innovative activities as and when market conditions improve.

Gartner defines companies that innovate as at the leading edge of technology and embrace the big bang approach. They develop accurate cost-benefit models that link IT changes to business metrics so that they can quantify benefits and justify the radical transformations they encourage.