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The changing role of the CIO in financial services
Information technology (IT) in financial services has traditionally been viewed as an operational detail that takes a backseat to business strategy. But in today’s technology-driven world, strategy and IT are inextricably linked. In fact, more often than not IT is now the primary catalyst for competitive advantage and strategic disruption in financial services. Every company is a technology company at its core. This is especially true in financial services, creating the need for a new kind of Chief Information Officer (CIO).
This is a remarkable era of industry transformations, with financial services at the forefront of the squeeze and stretch of many seismic market shifts. This evolving landscape presents the CIO with the opportunity to expand their role and advance opportunities to elevate their company as it’s primary agent for change – but there’s a lot of ground to cover.
Traditionally, a CIO’s primary role has been to oversee and manage an organization’s IT systems, resources, and investments: responding to requests from the business for new systems and capabilities; overseeing internal IT development, operations, compliance, and maintenance; and perhaps most important, ensuring the organization’s systems are always up-and running and ready to support the business. However, with the continual adoption and immediacy of digital tools generating more data and insights about consumers and organizations than ever before, coupled with the shift from internal to external IT resources, the traditional role of the CIO is rapidly expanding.
As the synergy between digital and data technologies power much of the future business strategy, the CIO must become ever more fluent and influential in the business issues. According to Deloitte’s 2018 global CIO survey of more than 1,400 IT professionals, more than half of CIOs serve as “trusted operators,” with a focus on IT efficiency, reliability and cost containment. However, less than 10 percent of today’s CIOs are digital vanguards – leaders who align their business and digital strategies.
In this rapidly shifting business environment, financial services institutions need visionary technology leadership, particularly in the emerging technology areas that may ultimately determine which companies win or lose. This is an immense opportunity for CIOs to elevate their business value and strategic impact; however, it also presents significant challenges. To meet their companies’ needs, they must play a very different role and provide value in very different ways.
To help companies successfully operate and compete in a financial services marketplace driven by technology, CIOs need to adapt their capabilities and elevate their responsibilities in four key areas:
- Strategist and visionary
- Bridging the gap between the past and future
- Ecosystem orchestrator
- Start-up leader
The financial services marketplace is experiencing unprecedented change and technology is the driving force. To compete effectively, companies need visionary technology leaders who can steer them into the future. This is an exciting and challenging time for financial services CIOs. Their expanding new roles provide tremendous opportunities for increased business value and strategic impact; however, they will likely involve taking on new responsibilities and demonstrating new capabilities that may be very different from before and requires an amplified and strategic leadership approach.
Striking a balance between operator, innovator, and integrator is the true challenge for leadership roles in financial services today. Are CIOs ready to meet the challenge? The changing role of the CIO in financial services.