For many investment firms, decades of technology investments in cloud migration, process automation, AI, and other technologies have not contributed to significant efficiency gains. McKinsey reports that even as the cost of financial services technology continues to climb, only one in four financial institutions sustains cost savings beyond four years; aggregate industry productivity has remained flat for over two decades as well. For CTOs and COOs accountable for demonstrating ROI on technology spending, this productivity gap represents both a strategic challenge and an urgent call to action.
The Sobering Reality Behind Financial Services Technology Investments
McKinsey shared some operational realities of this trend as it comes into focus:
- At one financial institution, technology employees logged only 4.5 hours during eight-hour shifts, with a mere 2.2 hours spent on actual productive work.
- Another firm experienced an 80% drop in outbound sales calls after implementing remote-work Fridays.
While these are individual cases, they may also indicate symptoms of a broader misalignment between technology deployment, readiness, and organizational success. For example, recent AI deployments reinforce this idea. While 54% of financial services workers have used AI in the past year, only 14% use generative AI daily, PwC reports. That figure is barely up from 12% in 2024.
Four Root Causes of Technology Investment Failure
Central to this issue is the reality that problems with organizational models cannot be fixed by technology adoption alone. Consider talent management models as an example; McKinsey’s analysis of 1,200 public companies over 10 years identifies four critical failure patterns that financial institutions repeatedly exhibit:
- Organizations apply technologies without fundamentally reevaluating business and operating models. These incremental adjustments miss the structural inefficiencies that technology alone cannot fix.
- Firms fail to sustain focus on change management, goal clarity, skill evaluation, and embedding improvements into existing workforce planning systems. Technology implementations launch with momentum but fade as leadership attention shifts.
- Technology initiatives don’t address fundamental work redesign; they automate what work is currently done without examining how it should be done. Without examining structural decisions, mindsets, and behaviors, technology simply automates inefficient processes.
- Workforce transformation efforts don’t coincide with new technology adoption. They “lack proper integration and attention,” McKinsey notes, so that their human capital and technology strategies fail to align.
Organizations with weak or informal management systems struggled most, lacking strategies that translate into specific goals for every organizational layer. Beyond organizational structure, a critical but overlooked barrier emerges from the workforce itself.
Employees’ Personal Strains Are Productivity Killers
PwC’s Global Workforce Hopes and Fears Survey 2025 captured insights from nearly 50,000 workers across 28 sectors in 48 major economies. It revealed another overlooked barrier to productivity technology adoption alone cannot fix: 55% of the workforce experiences financial strain, up from 52% in 2024, according to the results.
For employers, this is a crisis in both productivity and morale. Workers under financial pressure demonstrate measurably lower performance: fewer than half trust their manager or feel their employer cares about their well-being, compared to about two-thirds of financially secure workers. They’re also less comfortable speaking openly about challenges, reducing their ability to embrace new technologies like AI or respond to technology change initiatives.
The motivation factors are equally stark. Workers highly optimistic about their role’s future are about twice as motivated as pessimistic peers. Those confident in job security are 51% more motivated than insecure colleagues. Yet fewer than half of employees received raises in the past year, and those without compensation increases are markedly less likely to feel satisfied, inspired, or excited at work.
Meanwhile, employees who adapt to new technologies are rewarded: Those with AI skills earn a 56% wage premium, more than double that of the previous year. These premiums are greatest in AI-exposed sectors like financial services, according to the report. Financial services workers show higher confidence than other industries—43% believe AI will increase job security over the next three years, compared to 38% globally—and 67% learned new skills at work, helping their career, 6% higher than the global average.
Even so, most organizations aren’t connecting financial wellness to technology adoption strategies, missing the opportunity to address both productivity and compensation concerns simultaneously.
All of this suggests that the talent is ready; the organizational infrastructure to support them is not.
Integrated Solutions for Financial Services Technology
Researchers also identify real solutions to help financial firms realize true results in efficiency, employee satisfaction, and success across metrics.’ Here are two examples from McKinsey’s report.
1. Determining Priorities by “Clean-Sheeting”
McKinsey’s research points to a fundamental shift from incremental improvements to “clean-sheeting”, or building organizational design from scratch rather than optimizing inherited structures.
One global bank exemplifies this approach: rather than targeting efficiency opportunities, the leadership team asked what capabilities they would prioritize if they were to build from scratch. In doing so, they discovered that more than 50% of resources were misplaced; they also identified missing capabilities within their remaining resources. This created substantial opportunities that would have been undiscoverable through incremental change methods.
2. Getting Honest about End-to-End Expenses
Another financial services firm gained visibility into its support function costs by evaluating true end-to-end expenses. The shared-services functions supported multiple business lines, and fragmented ownership camouflaged real costs. Once senior leaders saw the complete picture, they identified areas where resources were greatly inflated: their product organization was three times the size of their distribution organization.
Strategic Workforce Planning: The Missing Integration
According to KPMG research, few organizations today are highly confident in workforce plans beyond a one-year outlook. Plans rarely directly link to value creation priorities or provide sufficient detail about roles, skills, and technologies required. Even fewer organizations can readily combine the traditional disciplines of strategic workforce planning, organization design, location and real estate strategy, technology adoption, and budgeting. Most don’t know whether they’re maximizing ROI on investments.
Effective strategic workforce planning requires cross-functional collaboration that few investment firms achieve. In a successful model:
- HR brings talent management insights, current workforce capabilities, skill gaps, and succession planning perspectives.
- Finance provides budgetary constraints, financial performance metrics, and resource allocation as critical inputs.
- Business operations offer a deep understanding of strategic priorities—expanding into new markets, launching new products.
McKinsey emphasizes that distinctive employee experiences drive engagement with new technologies: people are eight times more likely to stay at a company and four times more committed to the organization when they experience differentiated value. Yet few firms look beyond the minimum required standard for keeping people satisfied, missing opportunities to deliver real, measurable daily advantages for employees and competitive advantages for their firms.
Implementation Roadmap: Pairing Financial Services Technology with Organizational Transformation
Firms must integrate technology adoption with real organizational change to drive the real improvements they want. Positioning technology as an enabler rather than an endpoint can help drive these gains. Here we share a potential phased approach to realizing these results.
Diagnostics: Creating a Foundation Based on Evidence
Analyze actual employee productivity using workforce analytics platforms, monitoring data, and project management systems. Review which automation projects delivered sustained savings beyond four years, versus those that faded after implementation. Survey the workforce on trust, psychological safety, alignment, and financial wellness. Identify shadow functions within departments; i.e., those that replicate approved functions rather than adopting them.
Quick Wins: Demonstrate Technology-Enabled Value
Deploy collaboration platforms and analytics dashboards that accelerate decision-making. Organizations with faster decision-making experience growth rates 2.5 times faster than peers and are twice as profitable, McKinsey reports. Firms can address financial strain through AI-powered financial planning tools and upskilling platforms. Workforce analytics can help them identify high-performing managers, then share their practices through technology-augmented coaching as well.
Medium-Term Rewiring: Integrate Technology into Redesign
Redesign your highest-cost support functions by mapping current processes and identifying where work can be eliminated, combined, or outsourced. Use data platforms to show real-time visibility of your workforce skills, gaps, and future needs based on your business plans. Create transparent communication about how roles will change, which skills will be most valuable, and where people can develop themselves. Make these conversations ongoing, not one-time events.
Long-Term Transformation: Embed Technology into Your Company Culture
Build trust through consistent technology delivery and transparent communication about challenges. Connect financial wellness programs to upskilling platforms with measurable career progression. Establish experimentation frameworks where teams safely test new technologies before scaling. Develop meaning-at-work initiatives showing how technology augments employee capacity.
Measuring Success Beyond Cost Savings
Firms are often drawn to traditional change metrics such as cost savings and profits. These may include more sophisticated metrics such as cost-to-income ratios and revenue per employee. But don’t overlook other critical soft metrics such as employee engagement, trust scores, psychological safety, technology adoption rates, and skills enrollment. Consider alternative metrics such as output per hour, shadow function reduction, and cross-functional collaboration effectiveness as well.
When Financial Services Technology Enables the Workforce, the Organization Delivers
These productivity barriers in financial services are not associated with technology; they are organizational problems that technology often exposes. Investment firms that treat digital transformation as solely a technology initiative will continue generating disappointing returns.
Instead, firms must recognize technology adoption as one component of a broader organizational rewiring that includes workforce planning, trust-building, redesigning workflows, and a focus on financial wellness. In doing so, they can begin capturing the efficiency dividends that technology promises.
Partner with Option One Technologies
Option One Technologies helps investment firms implement the integrated technology and organizational strategies needed to achieve sustained productivity gains. Our team combines deep financial services expertise with advanced cloud and managed IT capabilities to support comprehensive transformation. Contact us today to discuss how we can help your firm deliver measurable, lasting efficiency improvements.
