During 2020, some very complex financial services (FS) firms – particularly those that have historically been slow to adopt technology – accelerated their digital transformation like never before.
Faced with a dramatically changing world, they not only needed to be prepared for the unknown; they needed to be ready for it at speed and scale.
A disruptive shifting of gears
Today, as firms look to a new future, the acceleration continues. Banks are taking their learnings from the past 12 months and applying them across all areas of the business. Escalating the velocity of change as well as the accuracy of change.
Right now, costs have greater focus, new pathways are being sought for profitable growth and, in some cases, risk averse decision making has had the shackles removed.
In fact, for those firms that have pushed the button, there’s a sense of returning to basics; of starting again and thinking less like a bank and acting more like a technology company.
Strengthening resilience, accelerating transformation
During our recent CBI Insight Event, “Strengthening resilience, accelerating transformation” the discussion looked at ways IT vendors might respond to the changing environment. The overwhelming feeling was that IT conversations should be closer aligned to the drive for greater resilience and the need for transformation to happen at pace.
Even though the last 12 months may have been relatively successful, there will have been constraints on service delivery and areas of risk management compromised. These weaknesses need to be addressed and learnings implemented for longer-term stability.
Resilience must also be demonstrated in the digital experiences that customers demand as well as product development and efforts to improve time to market. All must have resiliency built-in.
“Even in a highly regulated industry, you’ve still got to be resilient and prove that you can continue moving faster.
Brian Hayes, Financial Services Industry Lead of VMware
But the move now is really to say, actually, you know technology isn’t just about cost. It’s about creating capability with technology that solves my business problems. It’s about creating new services and products with technology.
The Momentum Customer Buying Index
An insight from Momentum’s recent Customer Buying Index paints an interesting picture about the levels of investment in AI and data from FS firms.
While the average investment level from organisations is around 26%, for FS firms it jumps significantly. In fact, almost 50% have had at least one big bet in AI and data over the recent past.
Clearly data has become a bank’s most important commodity. Banks have always held vast amounts inside their organisations but their ability to interpret and extract value from it is something they have always struggled with.
This is changing. FS firms are now driving forward a new world of hyper-personalisation and finding more relevant and tailored ways to connect with customers as well as develop innovative new products.
The role of the CIO in FS
Another important point discussed was regarding the role of the CIO within FS firms. In other industries we hear a lot about the role of the CFO and CEO and how both are becoming more tech savvy and play a big part in the buying decision. However, in FS, this has not happened. Here, the CIO remains a critical gatekeeper and someone who holds the purse strings on IT purchasing.
While overseeing spend is important, it’s also important to note that the CIO has a key role in reassuring the CEO on the transformations being deployed and investment being made.
That means putting in place a pragmatic roadmap for change, showing that the CIO’s partners and vendors are aligned with the transformation projects and, lastly, it means providing reassurance that the approach is doing all it should – driving resilience, mitigating risk while opening the door to new levels of product and service innovation.
How should vendors respond?
- Communicate that your proposition supports the focus on acceleration
- Explain the ways you can enhance resilience
- Look at ways you can enable and support conversations between different functions inside the FS firm and help move things forward