Nearly half of banking CIOs surveyed in late 2015 are currently leading their organization’s digital transformation. And little wonder: From their cross-organizational vantage point, CIOs are uniquely positioned to foster the strong collaboration and innovation needed across the enterprise—and harness the power of the IT value chain.
Many, however, find it necessary to reinvent themselves to succeed in this vital work. Our study identified the top area where improvement is needed: fostering collaborative partnerships with senior business leaders, especially CEOs and chief marketing officers (CMOs), along with any other execs involved with shaping customer experience.
CIOs must also embrace an entrepreneurial mindset and encourage innovative thinking throughout the organization. They need to inspire a digital vision by investing in new financial technologies and partnerships.
In short, CIOs need to act as the lead digital change agent in the enterprise. By making this shift, CIOs can help their organizations execute the four mandates required for success in the digital era of banking:
Transform the customer experience: CIOs can forge relationships with FinTech startups and other innovators to integrate new capabilities with mainstream banking systems, such as polymorphic payments (represented by a proliferation of payment methods and types). With the growth of cashless, online and mobile transactions, CIOs can also support the conversion of branches to concept stores that deliver immersive services. With Millennials choosing banks based on availability and level of omnichannel banking services (through websites and apps, for example), CIOs can help banks respond by developing customer experience platforms that deliver on-demand customer self-service and customer-centered journeys.
Integrate digital and physical channels: Despite making major investments in digital, less than one quarter of banks have integrated their online, social and mobile channels. Banks need to integrate sales and service across the digital and physical worlds, standardize business processes across channels, and use common customer data and analytics to develop a holistic view of the customer relationship.
Digitize middle- and back-office functions: CIOs need to revitalize the technology foundation to accommodate customer centricity and fast change. Areas to explore include intelligent process automation, modular architectures, open APIs (application programming interfaces) and the use of scalable, low-cost microservices for functions such as online bill payment setup, loan applications and money transfers between accounts.
Deliver analytics-powered digital tools to customer-facing personnel: The human touch remains essential, even in a digital banking world. In collaboration with marketing, CIOs need to deliver predictive analytics and adaptive algorithms to simplify banking processes and enable delivery of proactive, personalized expert advice and value—through targeted use of consumer preference and transaction data.
It’s critical to note that while digital-minded CIOs stand well positioned to advance the transformational agenda, they cannot complete this vital work themselves. In our study, roughly 70 percent of banking CIOs identified corporate culture as the primary obstacle to digital transformation, while 66 percent cited a lack of commitment from the top levels of the organization. CIOs must have the support of the CEO and business unit leaders to drive cultural change and nurture a mindset where digital is the norm.
To gain this support, CIOs need to complete the shift to digital change agent and become a catalyst for business transformation. This necessitates a balancing act, as they also need to continue delivering on the traditional imperatives of legacy IT. Meanwhile, as the executive sponsor, the CEO needs to adopt the venture capitalist role: reading shifts in the marketplace, securing funding for promising initiatives and working with the CIO on a collaborative roadmap for digital maturity.
None of these changes are easy to make. They require CIOs to assert themselves in new—and perhaps unfamiliar—ways. But by doing so, they can earn their seat at the executive table alongside their fellow leaders.
Just as digital technologies have disrupted banking, so will they distinguish winners from also-rans in the banking industry of the future. With the CEO’s engagement and sponsorship, CIOs can serve as the change agents that drive their organizations to develop digital maturity and proficiency. And viewed in light of the potential to compete in today’s congested and fiercely competitive banking environment, change is good indeed.
Philippe Dintrans is senior vice president and global consulting leader of Cognizant Business Consulting’s Banking and Financial Services practice. He can be reached at Philippe.Dintrans@cognizant.com.