Gartner Research

3 Factors to Drive Growth and Optimize Costs During Times of Crisis in Financial Services

Published: 19 April 2022


Digital transformation has become an unequal race in financial services, and the gap between leaders and laggards widens during crises. CIOs must learn differentiating traits from digital accelerators: higher risk appetite, faster innovation cycles and an evolving corporate culture.


Key Findings
  • The digital gap in the financial services industry widened in the months following the onset of the COVID-19 pandemic. Four distinct cohorts with different patterns emerged: accelerators, responders, procrastinators and laggards.

  • Digital accelerators and responders innovate at a faster pace, demonstrate a higher appetite for risk and adapt their cultural traits to move faster and at a larger scale.

  • As a consequence, digital accelerators and responders are able to grow their revenue and optimize their cost structures, which gives them a competitive advantage to outpace their industry peers.


CIOs leading financial services digital business strategy and innovation should:

  • Create an ongoing crisis investment plan to identify in advance which digital initiatives and emerging technologies they will continue to spend money on or increase their spending on, even if the financial outlook changes or is uncertain.

  • Work with their boards of directors and executive leadership teams to define how they will approach different types of risk, such as regulatory, reputational, operational and technological. Adapt the risk approach based on expected gains and losses in each area.

  • Implement operating model changes to focus the organization’s culture on innovation and adaptability. For example, adopt agile methodologies and a “learn fast” mindset, scale projects at the enterprise level and focus on talent upskilling through hiring and training programs.

  • Analyze the quantifiable value they have received so far from their investments in emerging technologies and apply business outcome metrics to gauge the impact of ongoing initiatives.


According to the 2022 Gartner CIO and Technology Executive Survey,44% of banking, investment and insurance respondents plan to increase funding in 2022 for digital business transformation initiatives. CIOs are optimistic about the business and IT outcomes of these investments. By 2023, on average, CIOs in financial services expect to generate 39.7% of their total revenue from digital products and services. In addition they believe 57% of their business processes will be optimized through digital capabilities, on average.

While this sounds like financial services is moving in a digital direction, our 2021 Innovation in Crisis surveysuggests there are actually significant differences in how individual financial services companies respond in executing during a crisis. These differences in response can affect the maturity of their digital initiatives.

We identified four distinct clusters of financial services organizations in our Innovation in Crisis survey by distinguishing two different dimensions:

  • Stage of digital business maturity prior to the pandemic (Gartner distinguishes five distinct stages: ambition, design, deliver, scale and refine.)

  • The pace of change in digital initiatives as a result of the pandemic (We broke that into separate stages ranging from “significantly slower” to “significantly faster.”)

Combining the two dimensions allows us to identify four distinct types of organizations (see Figure 1):

  • Laggards, which continue to show a low digital maturity and lose ground as their pace of change decreased in the aftermath of the crisis

  • Procrastinators, which had a relatively high digital maturity prior to the pandemic but were losing momentum as they slowed their digital transformation

  • Accelerators, which intend to build out their leading position with a high level of digital maturity and by maintaining or even increasing their digital transformation pace

  • Responders, which had a low digital maturity in the past but are now trying to catch up with their industry peers at a much faster pace

Figure 1: A Digital Chasm Emerges in Financial Services

Laggards, responders and accelerators were almost equally represented in our survey, while procrastinators formed the smallest cohort.

This research evaluates the impact of a faster pace of change and the traits that set digital accelerators and responders apart from their industry peers. Knowing this will help CIOs better understand what steps they can take to accelerate the digital transformation journey in their own organizations.


The rules of competition are currently being rewritten in the financial services industry. Digital accelerators or responders will, in the short and medium terms, accelerate their digitalization efforts. By doing so, they are widening the gap between themselves and the laggards and procrastinators.

We noticed significant differences in business performance between accelerators and responders and their laggard or procrastinator peers in achieving revenue growth and optimizing their cost structures before and after a crisis. Almost half of all accelerators, for instance, were able to increase their revenue performance, compared to less than one-quarter of the procrastinators. In cost optimization, the difference is even more obvious: 40% of the accelerators were more efficient in their cost optimization efforts versus only 13% of the procrastinators or 28% of the laggards (see Table 1).

These differences in achieving tangible business outcomes will ultimately translate into competitive advantages. If the data in Table 1 is the beginning of a trend, it is likely that almost three-quarters of laggards and procrastinators will miss those tangible business outcomes and continue to incur significantly high costs of sales and service. The result will be an ever more eroding competitive position.

In light of those significant differences in business performance, it is paramount for financial services CIOs to understand what accelerators and responders do differently so they can compete with their industry peers. There are three primary patterns we recommend following.

We have noted two main differences in the innovation behaviors of organizations that are more aggressive in pursuing their strategic digital goals for IT spending:

The faster innovation cycles of accelerators and responders manifest themselves, for instance, in the adoption of key technologies such as cloud computing and artificial intelligence (AI). Forty-three percent of the accelerators told us in our survey that they deployed cloud computing or plan to increase their cloud investments (versus only 13% of the laggards and procrastinators). There is a similar difference for AI: 31% of accelerators and only 8% of laggards plan to spend more on AI.

The fundamental drive for these innovation cycles comes from the top — executive management. According to the 2022 Gartner View from the Board of Directors Survey, 83% of financial services respondents say that digital technology initiatives are the top strategic business priority.Within that objective, digital acceleration is the primary motivation for respondents to invest in these technologies. It is therefore no surprise that CIOs try to address those needs.

Accelerating innovation cycles won’t be an easy task for many CIOs in the financial services industry, even if they have the budget for it.According to our 2022 IT key metrics data, banking and insurance CIOs spend approximately two-thirds of their annual IT budget on running the business, leaving one-third for business model growth and transformation. (To learn more, see and )The average maturity of innovation programs in the industry is mediocre at best. Based on previous research, we estimate that less than half of financial services organizations obtain best-in-class or even world-class leadership in innovation practices. Increasing innovation velocity requires CIOs to initiate dramatic shifts in their budgets and establish much more mature innovation practices throughout their organizations.

Accelerating innovation requires a different attitude toward risk. Our Innovation in Crisis survey shows clear differences between accelerators and responders and their laggard and procrastinator peers:

  • Sixty-six percent of accelerators and 67% of responders consider themselves to be (somewhat) risk seeking compared to only 52% of the laggards and 28% of the procrastinators.

  • One testament to that higher risk appetite is the interest in further developing value chains and business models. Forty-three percent of accelerators and 34% of responders plan to develop new business models in the aftermath of the COVID-19 crisis compared to only 19% of the procrastinators and laggards.

This higher risk appetite mirrors the results of our 2022 View from the Board of Directors survey. In that survey, 37% of the financial services respondents reported having accepted or expecting to accept higher risk in pursuit of their 2021-2022 corporate objectives.Continued and growing long-term economic uncertainty and the emergence of disruptive business from competitors such as fintechs and digital giants are primary drivers for reevaluating risk appetite. For example, the fact that fintechs increasingly occupy key segments of the value chain, such as payments in banking, has become a call to action for business and IT leaders alike.

In addition to board support, there are two other reasons financial services CIOs are showing a greater appetite for risk:

Increasing their risk appetites will be easier said than done for financial services CIOs. For many, it will mean working against their historical objectives. According to findings from the 2022 Gartner CIO and Technology Executive survey, IT leaders in the industry are still incredibly risk-averse, and more than 75% would not sacrifice short-term profits to reach long-term business objectives.Less than one-quarter of respondents said, for instance, they would aggressively pursue vendors’ beta programs or accept the risk of new technologies by deploying them as early as possible.

Increasing innovation pace and adopting a higher risk appetite all contribute to the third pattern we found — that the overall culture is evolving at different speeds for different organization types. We found, in previous research, that corporate culture (or the lack of culture) was the primary inhibitor for change and digital transformation in the financial services industry (see ). Our Innovation in Crisis survey confirms that both accelerators and responders exhibit significant differences in their cultures and attitudes:

Overcoming internal barriers and adapting the corporate culture are prerequisites for raising the digital dexterity of associates in financial services organizations in both business and IT departments. In previous research (see) we showed it won’t be sufficient for IT leaders in financial services to invest in the “right” technologies or be early adopters. Organizations must also adapt their leadership styles and operating models to get the best results from their technology investments. The traits of digital accelerators confirm this analysis.

There are significant differences between the clusters of organizations featured in our Innovation in Crisis survey. If this pattern continues, the aftermath of the pandemic will — together with an increasingly volatile market environment — lead to even more differentiation among those clusters. Digital accelerators and responders can better grow revenue and optimize their cost structures as they innovate faster, demonstrate a higher appetite for risk and adapt their corporate cultures to these volatile markets. As a consequence, they will outpace their competition.

How should CIOs drive their organizations to become digital accelerators and responders? In the 2022 Gartner CIO and Technology Executive Survey, we examined the composable business attributes that were likely to make an organization perform better than others (see ). Composable business is a combination of mindset, practices and tools that enable enterprises to sense and respond to changing business conditions. The three principles of composable business are:

  • Composable thinking — A mindset to guide business change in the face of opportunity and uncertainty

  • Composable business architecture — A blueprint of the business to manage the pace of business change

  • Composable technologies — The resources to digitalize the business

The three patterns we identified in our Innovation in Crisis survey align with those principles and the broader idea of composable business. Our composable business research confirms there are significant performance patterns among organizations that have a high, moderate or low degree of composability (see Figure 2).

Figure 2: Business Composability in Financial Services

Based on the 2022 Gartner CIO and Technology Executive Survey, only 7% of financial services respondents would fall into the category of “high composability,” but it’s obvious that those 7% perform significantly better than organizations with moderate or low composability. This is true for not only revenue growth and cost optimization but also risk mitigation and overall business performance.


The 2022 Gartner CIO and Technology Executive Survey. This survey was conducted to help CIOs and technology executives adopt business composability as a means to thrive during periods of volatility and uncertainty. It was conducted online from 3 May 2021 through 19 July 2021 among members of Gartner Executive Programs and other technology executives. Qualified respondents are each the most senior IT leader (CIO) for their overall organizations or a part of their organizations (for example, a business unit or region). The total sample is 2,387, with representation from all geographies and industry sectors (public and private), including 391 from financial services (banking and insurance). Disclaimer: Results do not represent global findings or the market as a whole but reflect sentiment of the respondents and companies surveyed.

The 2021 Gartner Innovation in Crisis Survey was conducted to assess the impact of COVID-19 on an organization’s digital business strategy as well as to understand the types of strategies undertaken by organizations that align with the respond-recover-renew framework. The research was conducted online from October through December 2020 among 1,215 respondents, with representation from all geographies and across 11 industry sectors, including 334 from banking. The respondents included senior leaders who were primary decision makers for their organizations’ or business units’ digital business strategies, or had a high level of influence in those decisions.

The 2022 Gartner View From the Board of Directors Survey sought to understand how boards of directors (BoDs) will address the risk from economic and political volatility and a multipolar world, and their intent to convert digital acceleration to digital momentum. The survey also helps understand the impact of the key societal issues that took center stage during the pandemic on BoDs’ strategy and investment approaches. The survey was conducted online from May through June 2021 among 273 respondents from the U.S., Europe and Asia/Pacific. Fifty-one respondents participated from the financial services industry. Companies were screened to be midsize, large or global enterprises. Respondents were required to be a board director or a member of a corporate BoD. If respondents served on multiple boards, they answered for the largest company, defined by its annual revenue, for which they are a board member. Disclaimer: Results of this survey do not represent global findings or the market as a whole but reflect the sentiments of the respondents and companies surveyed.

Gartner Recommended Reading

Access Research

Already a Gartner client?

To view this research and much more, become a client.

Speak with a Gartner specialist to learn how you can access peer and practitioner research backed by proprietary data, insights, advice and tools to help you achieve stronger performance.

By clicking the "Continue" button, you are agreeing to the Gartner Terms of Use and Privacy Policy.

Gartner research: Trusted insight for executives and their teams

What is Gartner research?

Gartner research, which includes in-depth proprietary studies, peer and industry best practices, trend analysis and quantitative modeling, enables us to offer innovative approaches that can help you drive stronger, more sustainable business performance.

Gartner research is unique, thanks to:

Independence and objectivity

Our independence as a research firm enables our experts to provide unbiased advice you can trust.

Actionable insights

Not only is Gartner research unbiased, it also contains key take-aways and recommendations for impactful next steps.

Proprietary methodologies

Our research practices and procedures distill large volumes of data into clear, precise recommendations.

Gartner research is just one of our many offerings.

We provide actionable, objective insight to help organizations make smarter, faster decisions to stay ahead of disruption and accelerate growth.

Tap into our experts

We offer one-on-one guidance tailored to your mission-critical priorities.

Pick the right tools and providers

We work with you to select the best-fit providers and tools, so you avoid the costly repercussions of a poor decision.

Create a network

Connect directly with peers to discuss common issues and initiatives and accelerate, validate and solidify your strategy.

Experience Information Technology conferences

Join your peers for the unveiling of the latest insights at Gartner conferences.

©2022 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. and its affiliates. This publication may not be reproduced or distributed in any form without Gartner’s prior written permission. It consists of the opinions of Gartner’s research organization, which should not be construed as statements of fact. While the information contained in this publication has been obtained from sources believed to be reliable, Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although Gartner research may address legal and financial issues, Gartner does not provide legal or investment advice and its research should not be construed or used as such. Your access and use of this publication are governed by Gartner’s Usage Policy. Gartner prides itself on its reputation for independence and objectivity. Its research is produced independently by its research organization without input or influence from any third party. For further information, see Guiding Principles on Independence and Objectivity.