The hesitation to innovate makes the old school industries particularly vulnerable to challenges from disrupters that offer easier ways for customers to do banking or buy and manage their insurance.

Most startups that try to break into the market with revolutionary technology fail, which is why the venture capitalists that often back them usually are investing in a large number of companies. They expect most to never make it, but their hope is that the few that do make it will more than pay for the failures.

Graham Lloyd, Pegasystems’ director and industry principal of financial services, said the traditional financial sector has to try out more new ideas, and accept that many of them will fail.

Related: Hey insurance industry, wake the #@$& up!

He also clarified, in response to a question from BenefitsPRO, taking risks in pursuit of new technology should not be confused with pursuing the types of risky business practices that undermined the global financial system and provoked the 2008 economic collapse.

“(T)hey also need to learn that innovation is a percentages game and that innovation failures are acceptable at a higher level than the credit risk failures, which may be their unwitting yardstick — just don’t confuse the two,” he said in an emailed statement. “New technology should not compromise their risk tolerance and should be rigorously tested before deployment, as would be any offering from (fast-moving consumer goods) or Pharma, for example.”

The executives surveyed for the study clearly recognized the threat on the horizon. Fifty percent say they expect new digitally-focused businesses to significantly or “massively” disrupt the industry in the next five years. Thirty-nine percent expect the Internet of Things to similarly impact the industry.