As old-style banking brings limited results, CIOs are looking for ways to reinvent their strategies to drive successful IT transformation initiatives.
FREMONT, CA: IT transformation in banking is far beyond just moving from legacy banking to a digital one. It is a necessary change in how banks learn about, interact with, and satisfy their customers. IT transformation in banking begins with an understanding of customer behavior, preferences, and more, which leads to significant changes in organizations. Banks today are increasingly influenced by ever-evolving customer needs and operational dynamics, forcing banking CIOs to think about innovative ways to thrive. Here is an IT transformation agenda for CIOs to make banks relevant at all times.
• Modernizing Legacy Systems
Aging technology at the heart of the banking industry is a significant barrier to success. With obsolete core systems, banks will struggle to compete with ‘born digital’ rivals, which have IT architecture built optimally from the ground up. Given that, a crucial aspect of IT transformation is modernizing these core systems using advanced technologies for continuous service delivery, leading to shorter release cycles. Despite the size and complexity of IT transformation, the risks of operating with an aging core system are far greater than the project risks involved in renewing the core. To mitigate risks in modernization, CIOs must exercise careful planning, mapping of current capabilities, and matching them with a core modernization strategy to achieve desired outcomes.
• Upskilling the Workforce
The financial services industry today is in high demand for new skills. As IT transformation replaces routine tasks, banking CIOs are expected to manage concerns around automation anxiety. This can be mitigated by injecting organizational objectives in the workforce, capitalizing on cross-functional teams, and reskilling employees. Understanding the trends and adapting new technology will add value in the future. Establishing an environment that is receptive to tech skills and new ways of thinking starts with leadership.
• Innovating To Grow
With the evolving technology landscape, banking CIOs' preferences have expanded from cost savings to bringing efficiency, improving processes, and driving innovation in the banks. As the priorities expand, it requires more resources, which are essential to growing innovation. So, it becomes inevitable for CIOs to keep up with the speed of change. CIOs have to think about this change and calculate the prospects of investing in new technologies while keeping the company’s budgets in mind.
• Finding External Partnership Opportunities
CIOs of banks and financial institutions should consider deeper partnerships with financial technology firms as a way to gain the agility they desire. Fintechs generally have a more in-depth focus on customer-centric solutions and processes. Collaboration can leverage both the strengths of fintechs, enabling banks to deliver innovative and wanted tools, products, and services to their customers.
Banks are under constant pressure to respond to shifting customer expectations. But the majority of them find that their existing IT system is unfit to address emerging digital banking requirements. CIOs realize that transformation is the only way to build true agility and IT modernization is the foundation. With that, competing banks can enter new geographies that would be expensive targets using legacy approaches. The above agenda can be useful for forward-thinking CIOs who are responding to the need for transformation by expanding their IT capabilities to develop new digital offerings.