The Transformation of the Digital Banking CIO
As legacy financial institutions strive to provide more digital functionality, the role of the CIO has become more important than ever. Today’s CIO in the banking industry is expected to acquire new skills and assume new responsibilities while fostering internal collaboration and creating a start-up culture.
To serve a changing market and respond to new competitors, retail banks and credit unions are rethinking and expanding the role of Chief Information Officer (CIO). Beyond improving the front-office and back-office digital functionality, the focus is increasingly on improving the consumer experience across the entire customer journey.
A survey of 50 banking CIOs by Cognizant sought to identify best practices for digital banking CIOs — in particular, how they partner with other department heads while integrating digital business capabilities into their organizations. The research also explored the challenges facing CIOs in their efforts to transform their organizations.
Among the key findings uncovered by their research:
CIOs also cited an increasing need to collaborate with chief marketing officers (CMO), sharing insights to improve multichannel experiences, product development, needs identification and personalization. Responding to these new challenges and expanded role, CIOs see the need to continuously remake and aggressively up-skill themselves and their organizations, according to Cognizant.
Cognizant identified five primary drivers of digital banking transformation that provides the foundation for the CIOs new role and responsibilities:
1. Accelerated pace of innovation. New technologies are providing new opportunities for CIOs to advance their organization’s product and service offerings.
2. Expanded customer-centric initiatives. A more technologically fluent consumer has forced banking organizations to focus on improved insight-driven personalized experiences. Beyond basic digitization of processes, CIOs need to understand consumer expectations being set by non-financial organizations.
3. Multichannel distribution and consumption. The digital consumer expects a consistent experience across touchpoints and channels. While digital banking has changed basic transactional interactions, branch banking still remains strategically important. As a result, CIOs must consider all channels and customer touchpoints as part of a strong digital strategy.
4. End-to-end process digitization. CIOs need to digitize the entire systems landscape, from the front office to the back office.
5. Enhanced customer service through digital tools. CIOs need to utilize digital tools to deliver new service offerings (P2P lending, crowdsourcing, PFM, etc.), and provide meaningful and relevant customer service experiences.
As the importance of digital technology, delivery and innovation increases, so does the collaborative responsibilities of the banking CIO. According to the Cognizant research, “Banking CIOs believe the essential elements for a successful digital transformation revolve around leadership, filling skill gaps, developing a clear strategy and understanding the benefits enabled by ‘being’ (vs. merely ‘doing”’ digital.” This requires expertise beyond the capabilities of the CIO.
To succeed in the new digital banking environment, Cognizant found a need for CIOs to expand the depth and breadth of their relationships within their organizations, particularly with senior leaders in business and marketing, as well as with specialists in digital strategy, enterprise architecture, infrastructure management and data management. CIOs should also be actively involved in shortlisting and selecting third-party partners, and in developing relevant performance requirements and measurement approaches.
