- The financial services industry ranks the most digitally sustainable in a new report released today; Korn Ferry’s Digital Sustainable Index
- The U.S. and U.K. are the most digitally sustainable of 14 countries measured, while Brazil and Turkey finished last
- Companies that continually adapt to changes in the digital economy are more profitable
Korn Ferry (NYSE:KFY) today announced findings from an in-depth global study, revealing that financial services companies lead the way when it comes to digital sustainability outpacing those in the technology industry.
The study, called “Korn Ferry Digital Sustainability Index,” is a measure of a business’s ability to adapt effectively and continuously to keep up with the rise of digital.
The research shows a correlation between digital sustainability and profitability, with high performers in the Index enjoying a 5.6 percentage point increase in profit margin (EBITDA) compared to low performers. For a mid-cap company with revenue of $7 billion, this could potentially represent a difference of $392 million.
“Financial companies have, for some time, had the compelling commercial drive to shift culture, processes and practices – seeking to protect customer data and market share while meeting new customer and talent demands,” said Michael Franzino, President, Korn Ferry Global Financial Services Practice. “Increasing global investment in fintech and intense competition from fintech hybrids have also triggered definitive action.”
Surprisingly, the technology industry did not make the top spot in the Korn Ferry Digital Sustainability Index, coming in at No. 2.
“The technology sector is not only made up of the high-growth ‘unicorns’ and disruptors of the world, but also decades-old legacy tech giants in need of structural, cultural and work process reform,” said Werner Penk, President, Korn Ferry Global Technology Practice. “The more traditional firms – once pioneers of the industry – now need to overhaul their strategies and work processes to ensure future survival.”
Rounding out the industry rankings for the Index, in order, are: Life Sciences & Healthcare (No. 3), and Industrials (No.4). Consumer companies, including retail, came in last at No. 5.
“Consumer companies are at a crossroads. Many have one foot in the digital world and one foot in the traditional storefront,” said Craig Rowley, Korn Ferry Senior Partner, Consumer and Retail. “Companies have adapted to e-commerce and have reduced time to delivery, but many are still playing catch up rather than anticipating what customers will want next. Leaders need to look way beyond the now and move as quickly as the industry is evolving.”
Based on the dimensions within the Index, researchers found that the United Kingdom ranked second in Digital Sustainability.
Stephen Griffiths, Senior Partner at Korn Ferry commented: “The traditional dominance of the U.K. as a digital leader could be under threat from rising global players, such as the Netherlands, unless steps are taken to invest strategically, build a skilled, specialised workforce, and develop enviable networks, at home and abroad. The economic and political uncertainty caused by Brexit is a concern for many companies and industries in Britain, which have built success on access to both the EU market and labour force. Now more than ever, the government needs to consider increasing connections beyond UK borders to drive partnerships, strengthen global trade alliances and share ideas and learnings.
“However, British industry has always demonstrated resilience and innovation during periods of uncertainty. The country has a strong creative services sector, where many of the skills which support digital sustainability are found. Add to this the concentration of Venture Capitalists in London, and the abundance of investors into the UK start up scene, and we have a rich environment for digital innovation – something businesses of all sizes should continue to benefit from.”
The United States ranked first out of the 14 nations analysed for digital sustainability.
However, experts warn that to keep its top spot, U.S. companies must look beyond pure-play technology to the human side of maintaining success. “U.S. organisations must focus on improving the people aspect of their business operations if they are to continue as digital sustainability leaders and gain the long-term financial advantages associated with it,” said Karin Lucas, President, North America Korn Ferry Hay Group.
The three countries that were at the bottom of the list on the Korn Ferry Digital Sustainability Index were Mexico (No. 12), Brazil (No. 13) and Turkey (No. 14).
“Clearly there are vast discrepancies in organizations’ capacity to continuously adapt to the digital economy across industries and regions,” said Swift. “But even for those companies that rank highly in the study, continuous improvement in this area is critical not only for success, but for survival.”
Korn Ferry’s Digital Sustainability Index (DSI) is based on economic modeling commissioned by Korn Ferry, designed by the Korn Ferry Institute and Oxford Analytica. This research redefines transformation in the context of significant and ongoing digital change, and establishes digital sustainability—an organization’s ability to continuously adapt and thrive in the digital economy—as a critical driver of financial success now and in the future.
The study combines proprietary Korn Ferry and publicly available data to quantify digital sustainability. It benchmarks 362 companies across five industries and 14 countries on the five dimensions that drive digital sustainability. Each industry and country is ranked based on its DSI score out of 100—reflecting its digital sustainability and performance in each dimension.
Industries: Consumer, Financial Services, Life Sciences & Healthcare, Industrials, Technology
Countries: Australia, Brazil, China, France, Germany, India, Japan, Mexico, Netherlands, Middle East (countries were Iran, Israel, Jordan, Lebanon, Qatar, Saudi Arabia and the UAE), Russia, Turkey, UK, US
Staying connected: keeping the numbers moving in the finance industry
By Robert Gibson-Bolton, Enterprise Manager, NetMotion
2020 will certainly be hard to forget. Amongst the many changes we have come to live with, for many of us it has been adapting to a new style of working. Whatever your take on it is, remote working, working from home or even agile working, one thing remains clear – for many of us, this could be the new-normal for the foreseeable future. The professional services sector is no different. For example, many finance practices around the world are now allowing staff to work from home part of the time. In addition, a recent KPMG report found that half of the UK’s financial services workforce want to work from home after COVID-19.
Will this therefore become the de facto working practice for the finance industry too? We can’t say for sure, but this agile approach to working has certainly caused a major rethink for many firms. And as they evolve and adapt to meet the demands of a different way of working, firms need to ensure that their workforce can seamlessly interact with each other and their clients – this is key if they want to continue to deliver exceptional client service. Whilst financial services organisations everywhere are busy adopting innovative new technologies to better reflect the ‘work from anywhere environment’, they need to ensure secure access to resources and strive towards enhancing the end user experience. Success will be replicating the office working experience at home or wherever else they may be.
It’s all well and good for a firm to boast about the ability of their staff to work successfully from home, but how do they also establish that their people are just as productive as they were before? Whilst the IT department will have to grapple with security and compliance issues that arise from agile and remote working, they must also ensure that their people can connect securely, without eschewing user experience. And it needs to be completely seamless, without compromising the service level provided to clients.
Why all the fuss?
Which brings us nicely to persistent connectivity. Persistent connectivity effectively allows you to do more. How frustrating for the user when connectivity drops, or when the device that they are working on can’t find a network to connect to (or if the device switches between different networks). When connectivity drops, and re-connection is required then there is that small period where the user is not connected at all. And the user might have to re-authenticate or log into their VPN again (most VPNs are rubbish when they lose connectivity). All of these different scenarios ultimately disrupt the user experience – persistent connectivity provides the flexibility to overcome these challenges. When you enjoy consistent connectivity, you are making sure that the technology works as it was designed to work, allowing staff to rely on optimum user experience, anytime, anywhere – in effect, supplying them with that office-like experience, wherever they are. Just think about how many hours might be spent on a train, in a hotel or even on a client site. Consistent connectivity is key here – consistent in any of these locations.
Connectivity will be a fundamental component for successful remote working as firms try to meet the demands of an increasingly mobile workforce. Ultimately, they need encrypted and reliable connections that enable them to quickly and easily reach business applications and services. Working in a disconnected environment can lead to frustrated workers, hardly fitting given all the new remote working policies in place.
Getting the user experience spot-on
When you fine-tune connection performance so that essential business applications run reliably across networks, you are essentially talking about traffic optimization. Mobile traffic optimization ensures that applications, resources and connections are tuned for weak and intermittent network coverage and can roam between wireless networks as conditions and availability change. When connections aren’t performing well, applications that are crucial for job performance can experience packet loss, jitter or latency that can make working on the hoof extremely tricky. Compared to wired networks, wireless networks operate under highly variable conditions, including such factors as terrain or congested mobile towers. When you optimise the flow of traffic, you are helping to manage packet loss. Effectively, packet losses are data loss, which happens very regularly when you’re on the move or transitioning between different networks. Applications that require a lot of data tend to become fairly unusable when you hit even minor packet loss, which can be a common occurrence for many on residential broadband or on local Wi-Fi. conversely, NetMotion can enable critical applications to work and prevent disruptions at over 50% packet loss – in this way, employees can rely on technology performing well in situations and locations where it simply could not before. That is incredibly powerful for firms.
The finance industry is facing many of the same challenges presented to other industries. It is a question of balancing the requirement for more sophisticated ways to ensure secure access to resources with the need to enhance the end user experience (key team members in particular). For finance firms everywhere, adopting the right technologies will ensure that their people can enjoy a ‘work-from-anywhere’ environment.
Hong Kong’s Cathay Pacific warns of capacity cuts, higher cash burn
(Reuters) – Cathay Pacific Airways Ltd on Monday warned passenger capacity could be cut by about 60% and monthly cash burn may rise if Hong Kong installs new measures that require flight crew to quarantine for two weeks.
Hong Kong’s flagship carrier said the expected move will increase cash burn by about HK$300 million ($38.70 million) to HK$400 million per month, on top of current HK$1 billion to HK$1.5 billion levels.
Hong Kong is set to require flight crew entering the Asian financial hub for more than two hours to quarantine in a hotel for two weeks, the South China Morning Post reported last week, citing sources.
“The new measure will have a significant impact on our ability to service our passenger and cargo markets,” Cathay said in a statement, adding that expected curbs will also reduce its cargo capacity by 25%.
The airline, in an internal memo seen by Reuters, requested for volunteers among its crew who could fly for three weeks, followed by two weeks of quarantine and 14 days free of duty, adding it will be a temporary measure and not all its flight will require such an operation.
“We continue to engage with key stakeholders in the Hong Kong Government,” the memo said.
The government did not immediately respond to a request for comment.
Separately, a company spokeswoman said the airline could not detail the impact on vaccine transport specifically in terms of cargo shipments.
The aviation industry has been hit hard by the COVID-19 pandemic as many countries imposed travel restrictions to contain its spread.
In December, Cathay’s passenger numbers fell by 98.7% compared to a year earlier, though cargo carriage was down by a smaller 32.3%.
($1 = 7.7512 Hong Kong dollars)
(Reporting by Shriya Ramakrishnan in Bengaluru; Additional reporting by Jamie Freed in Sydney and Twinnie Siu in Hong Kong; Editing by Bernard Orr and Arun Koyyur)
Travel stocks pull FTSE 100 lower as virus risks weigh
By Shashank Nayar
(Reuters) – London’s FTSE 100 fell on Monday, with travel stocks leading the declines, as rising coronavirus infections and extended lockdowns raised worries about the pace of economic growth, while fashion retailers Boohoo and ASOS gained on merger deals.
The British government quietly extended lockdown laws to give councils the power to close pubs, restaurants, shops and public spaces until July 17, the Telegraph reported on Saturday.
The blue-chip FTSE 100 index dipped 0.1%, with travel and energy stocks falling the most, while the mid-cap index rose 0.1%.
“Stock markets are crawling between optimism around the rollout of vaccines and worries that a jump in virus infections and fresh local lockdowns could further affect recovery prospects,” said David Madden, an analyst at CMC Markets.
Britain has detected 77 cases of the South African variant of COVID-19, the health minister said on Sunday while urging people to strictly follow lockdown rules as the best precaution against the country’s own potentially more deadly variant.
Prime Minister Boris Johnson had earlier warned that the government could not consider easing lockdown restrictions with infection rates at their current high levels and until it is confident that the vaccination programme is working.
The FTSE 100 shed 14.3% in value last year, its worst performance since a 31% plunge in 2008 and underperforming its European peers by a wide margin, as pandemic-driven lockdowns battered the economy.
Online fashion retailers Boohoo and ASOS surged 4.8% and 5.9%, each. Boohoo bought the Debenhams brand, while ASOS was in talks to buy the key brands of Philip Green’s collapsed Arcadia group.
Recruiter SThree Plc gained 0.9% after its profit, which nearly halved, still managed to beat market expectations and the company said it had resumed dividends.
(Reporting by Shashank Nayar in Bengaluru; editing by Uttaresh.V)
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