How Daemon is helping close the agility gap between financial services and retail

The financial services industry is under pressure from all sides. Slowing global growth, ongoing cyber threats, rising customer expectations, and changing regulations are constantly reshaping the scene. For leaders in the field, this isn’t just about digital transformation anymore; it’s about staying afloat and remaining relevant in the long run.

But there's good news: financial services don’t need to figure it out alone. We spoke to two Daemon experts about the right mindset, and some clever borrowing from other sectors, FSIs can reinvent how they operate and compete.

A perfect storm of challenges

According to Daemon’s Managing Consultant Vutlhari Rikhotso, FSI institutions are experiencing a perfect storm of challenges:

‘There are competing priorities across every level,’ he says. ‘You are under pressure to grow, to diversify, to defend against cyber threats, and at the same time, to protect the long-term health of your organisation. It is incredibly difficult to know where to begin.’

• Slowing growth: Even traditionally high-growth markets like India are seeing downward revisions to GDP targets. This puts pressure on FSIs to find new ways to grow and diversify.
• Cybersecurity: Cyber threats have moved far beyond the remit of IT teams. Institutions are now treating them as core business risks with the potential to bring operations to a standstill.
• Rising customer expectations: As technology evolves, so too do customer demands for frictionless, personalised, and real-time service.
• Regulatory and compliance pressures: New laws and shifting guidelines continue to add complexity to already burdened operations.
  
  

These priorities aren’t separate. Financial leaders aren’t just dealing with one issue at a time. Instead, they’re juggling interconnected pressures: slower growth forecasts, regulatory changes, and more advanced cyber threats, now seen as existential risks. All of this is happening amidst rising customer expectations, where real-time, personalized service is no longer a bonus but a must-have.

Connect with Vutlhari on LinkedIn

Your data is valuable, but fragmented

For many institutions, a significant challenge is the data estate. They have  a lot of customer data, but it’s spread out across different systems and business units, often not working together. ‘Especially in retail banking and insurance,’ says Kyle Hauptfleisch, Daemon’s Chief Growth Officer, ‘you might have ten different systems with relevant data, but the data isn’t sufficiently aggregated at the individual customer level. Until you fix that, personalisation is very difficult to achieve.’

Financial services aren’t alone in facing this issue. Retailers are going through it too, but with daily buying cycles and short feedback loops, they have had to become more agile, centralize customer data, and turn that data into insights fast.  

‘Successful retailers realized they can start disrupting themselves before someone else does,’ says Vutlhari Rikhotso. That mindset, more than any one technology, has sped up innovation in retail. Financial services can adopt the same approach if they lay the right groundwork.

Connect with Kyle on LinkedIn

The advantages of AI

AI is changing how organisations understand and support their customers. But if your internal systems and structures aren’t set up right, those benefits will just stay theoretical.  

‘You can use AI to pull insights and make relevant recommendations,’ Kyle explains. ‘For example, if a customer just took out a loan, you could offer travel insurance or suggest they start saving for their child’s future. But to do that, your systems need to be connected, and your teams need to be on the same page. It’s one way to tell which financial institutions are maturer with data management and which aren’t.’

That kind of personalisation isn’t just for marketing;  it’s how you deliver real value and relevance in the moment. But AI works well when it has clean, useful data. If you’re still struggling with basic integration and governance issues, AI can’t reach its full potential.  

Find out more about Daemon’s AI team

How FSI can learn from retailers

Retailers, especially since the pandemic, have shown that safe experimentation is doable. Agile methods, modular changes, and quick testing are now the norm. You don’t need to completely overhaul your core systems overnight; just create space to test, learn, and adapt. The cost of doing nothing now outweighs the risk of trying something new.  

FSIs can do the same, but it takes a mindset shift. Like Vutlhari points out, big banks often see innovation as risky, so they delay action until issues become urgent. ‘We have 12-hour batch processes that could take minutes with modern tech, but since they’re not causing problems right now, no one fixes them until it’s too late.’ 

Meanwhile, nimble fintechs are shaking up markets by grabbing market share and building loyalty. For traditional FSIs, the way forward isn’t big, sweeping changes but small, safe-to-fail initiatives that gradually reshape the organization from within.

Read more about our FSI offer

Where Daemon comes in

This is where consultancies like Daemon can play a key role.

Daemon has built its reputation working with giants like Sainsbury’s, Tesco and AJ Bell, to deliver change quickly, safely, and effectively. Our experience across the retail and financial sectors has given us an appreciation of complex, risk-sensitive environments full of legacy systems and internal silos.

What sets Daemon apart is its approach:

• Frontloaded stakeholder engagement: By identifying blockers early, Daemon avoids the classic trap of mid-project surprises that derail timelines.
• Understanding organisational complexity: They don’t just work on tech. They understand that company structure often mirrors system structure (Conway’s Law), and help reshape both for faster decision-making.
• AI-first thinking: Daemon has an entire AI squad focused on engineering know-how mixed with AI-first thinking. Their mission is to help clients move quicker, smarter, and without getting lost in the hype.
  
  

As Kyle notes, the goal is to evolve the software delivery lifecycle using AI to build faster, better, and cheaper, all without compromising quality, compliance, or stakeholder sanity.

Ultimately, none of this matters if the culture doesn’t change. FSI executives need to become more comfortable with uncertainty, experimentation, and iterative progress. Playing it safe no longer means playing it smart.

As Daemon’s team puts it, proof of value can come quickly. You don’t need to bet the house to start seeing returns. But you do need to be willing to explore.

If you’re looking for enterprise stability with fintech agility, talk to us today