Digital transformation and new technologies are the primary concerns of chief strategists in banks and insurance companies. According to a survey of over 100 Chief Strategy Officers (CSOs) from 20 countries in Europe, the Middle East, and Africa, 81% of them describe these factors as a disruptive trend in the financial industry.

These are insights from a survey conducted by Strategy&, the strategy consulting division of PwC. There has been a significant increase in this perspective compared to the 2018 survey, when 64% of CSOs held the same view. This underscores that technology continues to be the most significant disruptive force in the industry. Chief strategists are particularly focused on artificial intelligence (AI). Two-thirds of the respondents believe that AI will not only drastically change the industry but will also have far-reaching effects on revenues and profits if effectively utilized.

The next most important challenge is currently economic development and regulation, with 51% highlighting it, followed by changing customer preferences at 44%. Sustainability ranks fifth in terms of pressing issues, with 34% mentioning it, right after concerns about competition from fintechs at 35%. Only 12% cite demographic changes and the associated labor shortage. Despite concerns about economic prospects, the prevailing belief is that the economy will prove to be resilient and adaptable, as stated in the analysis "Navigating through dynamic complexity" prepared by the Strategy& team led by partners Philipp Wackerbeck and Felix Becht.

Regarding sustainability, there appear to be significant differences in how it is perceived in terms of its importance for strategic planning. The consulting firm notes, "While some CSOs are firmly convinced that ESG is a cornerstone of strategic planning, there were also individual voices suggesting that ESG is more relevant from a marketing, compliance, or regulatory perspective."

Overall, nine out of ten strategy executives expect industry disruptions in the coming years. According to the survey, 53% consider the expected magnitude of changes in the next two to five years as "strong," with an additional 35% anticipating moderate changes. In the previous 2018 survey, 40% had expected significant disruption within five to ten years.

The analysis highlights a significant perception gap between CEOs and Chief Strategy Officers (CSOs). While four out of five strategy leaders believe that their organizations are generally well-prepared to address strategic challenges, only 40% of the surveyed CEOs share this conviction.

Especially CSOs in the insurance industry express more confidence, with 85% of them considering their institutions to be disruption-ready, compared to 75% of those in the banking sector. The majority of CSOs see room for improvement in planning, with 55% believing that more dynamic and shorter planning cycles, such as two to three years instead of over five years, are appropriate.