Good morning. During rising economic uncertainty, companies often seek to identify ways to create value and invest. But that may be hard for a firm to do if it loses millions annually.
Fidelity National Information Services, or FIS, a fintech company led by CEO Stephanie Ferris, released new research in collaboration with Oxford Economics. Businesses are losing an average of $98.5 million per year primarily due to issues such as cyber threats (88%), fraud (79%), and regulatory complexities (65%). The findings are based on two global surveys of a combined 1,000 C-suite business and technology leaders across six different industries.
The fintech company talks with clients regularly about the money life cycle—money at rest, in motion, and at work—and the friction they experience, Firdaus Bhathena, chief technology officer at FIS, told me. “But what was missing was quantifying it,” he said. “You have this gut feeling that it’s worth investigating.” So FIS initiated the research, and the data “really helps us understand the scope of the problem, and it’s large.”
Payments taking longer than usual or not going through, and suffering from cybersecurity threats without the capability of quickly detecting fraud are some examples of issues in the money cycle, Bhathena said. In addition, financial technology skills gaps, reputational damage, and human error are issues as well. “You may not always be able to automate out of human involvement, but you can certainly put in checks and balances to ensure that the likelihood of mistakes being made is very low,” he said.
Why does he think many firms have become inefficient in these areas? “These are companies in different industries,” Bhathena explained. “The way technology change is accelerating these days, they’ve had to deal with change in their businesses, and they’ve all been at different levels of preparedness.”
We’re no longer in the days of slower incremental changes in technology, he said. “Think about the fall of 2022 when Gen AI kind of burst onto the scene,” Bhathena told me. Tech experts were familiar with the technology. “But, for most of the world, it was like this thing came out of nowhere,” he quipped. “I had somebody describe it this way—It’s like an overnight revolution 20 years in the making.”
Dealing with that change has proven challenging for companies, especially for larger companies used to doing business a certain way, Bhathena said. According to the survey findings, respondents from companies with teams dedicated to implementing and managing financial technology—in-house or outsourced—reported greater preparedness to tackle key challenges.
Does he have any advice? “You need to be bold but not reckless,” Bhathena said. “You need to look at what’s available on the technology landscape and make appropriate investments.”
Sheryl Estrada
sheryl.estrada@fortune.com
This story was originally featured on Fortune.com
