On September 8th, Aite-Novarica Group hosted our fourth quarterly Financial Services CIO/CTO Advisory Research Council meeting. A select group of CIOs, CTOs, and heads of architecture at banks and financial institutions (FIs) gathered to discuss challenges and share successes and insights from their digital transformation initiatives. Below are some key insights from the discussion.
Embarking on a digital journey without clear ownership can lead organizations directly into trouble. In Aite-Novarica Group’s Q3 digital strategy survey, we found that most FIs do not have a Chief Digital Officer, sparking a discussion on the best structure for ownership of digital initiatives.
Research Council members agreed that it’s ideal for ownership of digital initiatives to reside within the business, as it’s the most natural way to engage business stakeholders. If ownership formally resides with IT, as is often the case in smaller institutions, the digital owner(s) may encounter challenges getting business users to embrace the new technology. Therefore, the organization must be intentional about promoting engagement within the business and cultivating a sense of partnership.
Challenges and Resolutions in Communicating Digital Initiatives
Council members shared techniques and anecdotes for promoting the collaborative culture that serves as the foundation for an effective digital strategy. One IT leader said that cultivating individual relationships with business leaders can sometimes yield positive results. Another shared that having a C-suite proponent of digital engagement on the business side is the ideal situation, discussing the extent to which this has smoothed the digital journey at their institution. While resource availability is always a challenge these days, a C-level business champion can mitigate competing demands and priorities.
Whether there is one enterprise business owner or several departmental owners is determined by diversity of product lines. While divided ownership can be effective in certain organizational structures, it can also generate a lack of cohesion if there is not enough communication between the various business areas. FIs can solve this problem using a set of enterprise digital standards. Even if the different owners for each area have diverse priorities, giving all of them the same digital approach makes a world of difference and ensures a consistent, cohesive experience for clients and end users.
Training and Education Are Key to the Digital Journey
Business leaders may have diverse objectives and may not be naturally inclined to support digital initiatives without a fleshed-out understanding of how digital will impact their areas. Quantifiable results can take a while to achieve from digital investments, so individual business lines may see the pressing concerns of their quarterly targets as more immediate. Organizations should promote a shared understanding of the importance of digital by educating employees about how digital initiatives will tie into business objectives in the medium and long term. Fis are employing cutting-edge training strategies to generate adoption and support for digital technologies and initiatives.
One institution has implemented a digital adoption strategy to provide guidelines and guardrails for the change management associated with digital transformation. Another runs a rigorous, on-site training academy with distinct tracks, not only for new hires but also existing employees. An executive shared that their institution has enacted a policy of creating training videos for any frequently asked questions—not only for employees, but also for clients, as adoption can be a challenge with both demographics.
According to Aite-Novarica Group’s Q3 digital transformation study, the top three digital strategy goals for FIs in 2022 are increasing operational efficiency, delivering a modern CX, and reimagining customer service channels and delivery. In order to deliver on these, FIs need strong digital foundations. Establishing clear ownership is a key pillar of digital transformation and a process that should involve IT and business leaders alike.
How You Can Get Involved
The agenda of each quarterly meeting is driven by Research Council members’ interests and priorities. On December 1, we’ll meet to discuss IT budgets and projects for 2023. Click here to learn more about our Q4 2022 meeting.
Interested in learning more about how our strategic insights can help you navigate departmental- or enterprise-level digital transformation? Email me at [email protected], and I’ll reach out to schedule an introductory conversation about the Research Council and our FS CIO/CTO Advisory Practice.