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Top Challenges Facing Bank CIOs Over the Next Year

Bank Systems & Technology asked several industry experts for their take on what will be the next big issue bank technologists will tackle in 2014.
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Achieving Outstanding Customer Service

Ed O'Brien, Director, Banking Channels Advisory Service, Mercator

As most banks are in the midst of strategy planning season, now would be a good time to take a look at the most vexing challenges in the coming year. At the top of the list is a need to extend their reach beyond DDA accounts to all accounts — and all customers and lines of business — beyond traditional core banking and multichannel systems toward a more holistic omnichannel infrastructure.

This new view of banking is needed because today's banks are looking to extend their capabilities beyond traditional mainframe-based core systems with a primary mission of managing checking and savings transactions, and integrating core operations more deeply with their other financial and back-office systems. Among the bank-led initiatives are projects to tie together various legacy systems that have evolved over the years as part of organic growth or mergers and acquisitions.

These organizations, as well as their FI customers, are also working toward greater integration of their systems and other channels, marketing, customer relationship management (CRM), back office, and analytics systems toward something called omnichannel banking.

Although the desire to offer outstanding customer service is central to most banks' mission statements, the ability to execute on such plans has been limited. Only recently has the underlying technology of banking systems begun to enable truly interconnected systems.

Furthermore, many of the large core system providers are in the process of planning or implementing enhancements to their solutions to increase their interoperability with various customer accounts and back-office systems to improve overall customer experience.

To execute on this new, omnichannel banking paradigm, many banks are thoroughly evaluating their processes and systems and seeking new methods to better understand and connect with customers. This evaluation usually requires a thorough review of the way the FI's core, channel, CRM, and back-office systems work before the institution can determine how to make them work together more effectively and efficiently provide a 360-degree, real-time view of the customer.

[See Also: Innovation At Interop: Tackling Outdated Cultures ]

 

Bryan Yurcan is associate editor for Bank Systems and Technology. He has worked in various editorial capacities for newspapers and magazines for the past 8 years. After beginning his career as a municipal and courts reporter for daily newspapers in upstate New York, Bryan has ... View Full Bio

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Jonathan_Camhi
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Jonathan_Camhi,
User Rank: Author
1/22/2014 | 5:39:38 PM
re: Top Challenges Facing Bank CIOs Over the Next Year
That's a long ongoing challenge. I think many banks have been working on that the last few years. But with each new regulation the challenge transforms with different requirements and divisions involved.
babugb
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babugb,
User Rank: Apprentice
1/22/2014 | 8:44:57 AM
re: Top Challenges Facing Bank CIOs Over the Next Year
Another top challenge is - Making people, system, process, technology & data to be adoptive to the changing regulations.
Greg MacSweeney
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Greg MacSweeney,
User Rank: Author
10/8/2013 | 10:11:01 AM
re: Top Challenges Facing Bank CIOs Over the Next Year
I'm definitely hoping to hear more from the financial services community about how CDOs and Chief Data Scientists (CDS) fit into the organization. Right now, it seems to depend on the firm. Some have the CDS/CDO as part if the tech group. Others have them in the data group. And some have the CDO/CDS in separate groups. It's worth looking into.
Jonathan_Camhi
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Jonathan_Camhi,
User Rank: Author
10/7/2013 | 9:12:19 PM
re: Top Challenges Facing Bank CIOs Over the Next Year
I think there is also a big need around better collaboration tools to help enable innovation. Financial services organizations have been leery of third-party tools to help with that, but greater collaboration across organizations is a necessary ingredient for innovation.
Byurcan
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Byurcan,
User Rank: Author
10/7/2013 | 12:39:32 PM
re: Top Challenges Facing Bank CIOs Over the Next Year
Yes, several banks have "innovation labs" now (off the top of my head I know Capital One does, but there are also others I can't think of right now), it is becoming part of the expected culture.
Greg MacSweeney
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Greg MacSweeney,
User Rank: Author
10/7/2013 | 10:08:44 AM
re: Top Challenges Facing Bank CIOs Over the Next Year
Institutionalized innovation sounds like an oxymoron. However, you are right...many companies are trying to do just that. I guess that companies see how Google has institutionalized innovation by allowing employees to have a day to experiment with new ideas. Fidelity, State Street and many other financial services organizations have small (and sometimes large) groups that are trying to find new ways to approach old business problems.
KBurger
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KBurger,
User Rank: Author
10/5/2013 | 2:58:54 PM
re: Top Challenges Facing Bank CIOs Over the Next Year
I agree with each of these forecasts, but I think they all suggest another necessary focus/challenge for CIOs -- the need to work and coordinate increaslingly closely with a new generation of business executives: chief marketing officer, chief data/science officer, chief customer experience officer, etc. All these old/new functions are technology based but have their distinct mandates, too. CIOs will be have to be able to deliver and navigate in this environment.
KBurger
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KBurger,
User Rank: Author
10/5/2013 | 2:52:38 PM
re: Top Challenges Facing Bank CIOs Over the Next Year
I think one of the most interesting trends to watch in IT organizations across all industries, not just financial service, will be the efforts to "institutionalize" innovation --what you can do in terms of structure, job descriptions, incentives/compensation, training, etc. to make innovation part of everyone's job and something that happens in a meaningful way, not just buzzwords or rhetoric. Lots of efforts right now around innovation labs, hackathons, Chief Innovation Officers, etc. -- remains to be seen what kind of long-term impact these will have.
Nathan Golia
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Nathan Golia,
User Rank: Author
10/4/2013 | 7:57:41 PM
re: Top Challenges Facing Bank CIOs Over the Next Year
I liked Jegher's point about innovation management. In insurance we are seeing a proliferation of innovation labs and blitzes aimed at finding breakthrough apps. But I do wonder about the concept of putting structure around innovation. Can companies capture and recreate the spirit?
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