Uptime, Visions of the Future, and Tech Innovations are the Top Interests and Controversies of Financial Services CIOs
Drivers of FinTech—What Makes CIOs Tick?
The Digital Revolution is here. Financial consumers are saying, “I want more, and I want it now,” and power is no longer with the vendor, but with the customer. It happened fast—suddenly, banking consumers started demanding mobile applications that enable 24/7 account access, remote funds transfers, mobile deposit capabilities and had little to no understanding of why coming into a physical branch would ever be necessary. Insurance consumers have become accustomed to receiving personalized, real-time quotes automatically, and they’re plugging telematics devices into their vehicles for better rates.
The financial services industry is now driven entirely by the customer. At the same time, CIOs still have to grapple with maintaining business security and staying on top of industry and government compliance requirements. Yes, digital systems benefit the customer, but they make the long-established operational objectives of banking and insurance a lot more complex.
We asked financial CIOs who participated in the Peak 10 Financial Services and IT Study: Tackling the Digital Transformation study what their goals are. Here’s what they said:
- Considerably ambitious growth initiatives
- Global digitalization
- Responding to an industry-wide reluctance to technological change
Keeping Systems Up Around-the-Clock, Looking to the Future, and Embracing Innovation
So, what sort of questions are financial CIOs asking their peers? What are they talking about amongst themselves in an effort to optimize technology systems and enable healthy ROI? Here’s what Peak 10 Financial Services and IT Study respondents reported:
“What does your uptime look like, and how do you manage one-off scenarios?”- Director of Technology Services at US investment bank
Because of digitalization and the Internet of Things (IoT), the financial CIO is battling with the “always on, always connected” mentality. Uptime and availability are extremely important and downtime is not an option.
There’s a solution for the need, but it tends to make financial CIOs wary. Working with third-party partners for networking solutions can considerably improve uptime while eliminating the potential(s) for downtime. However, there is a tendency among decision makers within the financial industry to believe their IT teams can achieve better uptime themselves.
In reality, it is highly uncommon for any financial institution to have access to the power equipment, expertise, technology hardware, and architecture as can be found in a state-of-the-art colocation facilities. The right vendors will be highly specialized in colocation, and provide guaranteed uptime through advanced power configurations with N+1 redundancy, built-in redundancy throughout the entirety of the facility and the environments it houses, and building architecture designed specifically to prevent power failure.
Vision for their space’s future
“What is your vision for the next five years? If you could just sit back and close your eyes, where would you see yourself going forward? For example, seven years ago, everyone thought we were going to have flash storage. Flash storage is now cheaper than the other option.”- Director of Technology Services at US investment bank
There’s no doubt about it—the financial services industry is being pushed to do things differently. Yet, gaining some level of stability post-2008 has made it difficult to stomach changing the status quo at the risk of harmful changes, or breaking something that was working. Cloud in financial services, for example, has been a hot topic among CIOs. Yes, there are benefits, but does it have a place here? Can we give it a place?
Digitalization and concurrent evolving government and industry regulations are forcing the industry to change and adopt new technology, and it’s too fast for the comfort level of some decision-makers, compromising their ability to materialize a solid vision for the direction of the space.
As a result, CIOs are hungry to understand who is successfully making future-accommodating decisions within budget, as well as the technology they’re using to do it. Keeping up is a challenge, but knowing the fastest, most economical options helps.
Keeping up with constant change and innovating
“How do you know that you’re doing enough when somebody’s always got another idea? How do you measure it so that you know you are doing enough to help drive the business? Business is always going to ask for double what you can do.”- CTO at national home lender
Change and innovation have created a financial industry dichotomy: those at the forefront, who want to change and adopt new technologies, and those who would rather stick with aging languages, old systems, and legacy applications—because they work. There are two extremes, without question.
IT decision makers who are innovating may find it frustrating that some of their peers don’t share the same point of view—that innovation needs to happen in order for the industry to move forward successfully. But financial IT folks are a cautious people, and if maintaining configurations of the past allows things to continue to function successfully, avoiding change seems to make sense.
Regardless of the two camps, the success of financial organizations, both banking and insurance, will hinge largely on the ability of decision-makers to enact change and adopt the resources and technology that will meet their ambitious growth demands and keep customers of the digital age satisfied. According to McKinsey&Company, costs can be cut by up to 90 percent by digitizing information-intensive processes. Obviously, the benefits outweigh the disadvantages.
Allocating resources to technology initiatives tied to ROI, such as data analytics, automation, and robotization, for example, while mining qualified talent that can support innovative initiatives, will solidify the success of the financial sector; it just has to make sure it keeps up.
The Financial Sector Can Optimize IT: Embracing New Technology and Partners Alike
The undeniable evolution of IT in financial services does mean that CIOs are bracing themselves to find strategies for keeping pace with change, but there’s good news: there are a number of solutions for the digitalization-related challenges of today.
Trying to execute IT management solely in-house may no longer be the most viable option, or the most cost-effective. Before the world began demanding connectivity and real-time data 24/7, managing IT internally seemed like the most secure, effective method for financial services. But today, working with a partner is often times the safer bet. CIOs just need to be open to working with tech experts outside of the organization.
It’s critical to deliver all aspects of IT at an optimum level where the financial sector is concerned; its customers are demanding it. Today, the unique strategy of blending different vendors for varying purposes can satisfy that need. CIOs should make sure they’re looking at all the whole of IT, from infrastructure to applications, in order to guarantee success. It is possible to comfortably trust third-party partners. Many offers guaranteed expertise in security and compliance, which are the foundation of successful IT operations in finance.
IT operations are what make the ever-multiplying applications, portals, innovations, analytics initiatives, and instantaneous delivery of data possible, so investment in effective, reliable cloud, data center, and managed IT services will play a major role in giving the financial consumer what they want, while successfully facilitating adoption. Information technology is responsible for all of these directives, along with the enduring obligations that have always affected the financial sector: accelerating the adoption rate, security, and government regulations.
Answering the Questions of Financial CIOs
As your organization faces digitalization head-on, Peak 10 experts are here to help. Contact us today at www.peak10.com/contact-us or (866) 473-2510.
The Peak 10 Financial Services and IT Study: Tackling the Digital Transformation resulted in a great deal of future-oriented feedback among financial IT leaders. Discover how these trends can bring advantages and perspective to your IT organization. See the Peak 10 Industry Spotlight: Financial Services and IT.