The role of the bank CIO has shifted dramatically over the past decade. New regulatory requirements, intensifying cyber security threats, the rise of the mobile channel and an uncertain economic environment are just a few of the developments that are reshaping technology leaders’ top priorities.
As banks continue to undergo significant transformation in their business operations, what management capabilities will CIOs need to address? What will be the key issues facing senior technology executives, and what are the most important skills they must possess to effectively help their institutions deal with these challenges? Finally, are these capabilities already present in the banking industry, or is there a suite of talents that banks must do more to develop?
Michael J. McEvoy
Principal, Banking Practice, Novarica (New York):
A slowing economy and growing regulatory burdens, both of which weigh on bank profitability, will serve to prioritize the key issues facing CIOs over the coming years. More CIOs will be expected to help support revenue growth at their banks, and the issue will become a top-line priority for many. To contribute effectively, the CIO's ability to develop productive relationships with line-of-business heads and other stakeholders will be key.
A related issue facing bank technology leaders is cost containment, with CIOs redoubling their efforts to leverage technology for cost efficiencies in the face of an impending revenue drought. As an example, the use of videoconferencing and online chat as customer service tools both are means of leveraging technology to improve productivity without sacrificing service. If they are to identify these kinds of opportunities, CIOs will need to understand the underlying business needs as well as the supporting technologies. For execution and stakeholder buy-in, the CIO's relationships within the bank will be critical.
A further issue facing the CIO will be to continue to formulate a response to emerging channels, in particular social media and mobile banking. Success for the CIO will hinge on his or her ability to anticipate customer behavior and successfully articulate an appropriate response that garners support within the organization.
Head, Industry Business Unit Banking, SAP (Walldorf, Germany):
Banks around the world are undergoing significant business transformation. They aim to achieve reduced operational complexity, financial transparency and agility for innovations, which is critical to their growth. But they are challenged to offer tailored products to the right customers at the lowest cost. Successful banks will be the ones that maximize the tradeoffs among efficiency, flexibility and speed of innovation.
Hence, in 2012 bank CIOs will continue with the enablement of process standardization and management to reduce overall costs and complexity. They will provide solutions for proactive management of enterprisewide risk and compliance. They will reduce the time-to-market for differentiated products and services through flexible product management and pricing solutions. And they will deliver superior customer experience through mobility solutions integrated into multichannel architectures.
The role of bank CIOs has significantly changed over the past few years; in the future they will need to be much more business-minded, while at the same time remaining technologically savvy to be prepared for the ongoing waves of technological innovations, such as in-memory computing. This combination of business and technology transformation skills and experience rarely exists. To overcome this scarcity, it is crucial for banks to invest in their in-house talent and offer job rotation from business to IT and vice versa.