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When it comes to digitally transforming, the financial services sector is suffering from the old saying ‘too many cooks spoil the broth’. Much needed innovation and change is being held back because there are simply too many people involved in making decisions around new technology. As more and more startups enter the market, challenging norms and fundamentally changing services, processes and expectations, financial service organisations cannot afford to evolve at their current pace. The industry needs to re-think it’s approach to IT management; re-engineering the decision-making process so that it is more of a dictatorship than a democracy.
This might sound backwards or even a little extreme but there is a reason that the CIO role was introduced and has flourished since. Until recently, financial services organisations worked in multiple technology siloes that existed across teams, countries and regions. This structure worked until cloud platforms and automation were born, requiring these siloes to work together. With technology moving faster than people, organisations are still playing catch up and I don’t think any would be able to confidently claim to having one clear picture of the various technologies within their business. Having one central group overseeing how the different elements work together is therefore vital if organisations are going to evolve their technology environment.
And evolve they must, as the heritage environments that financial services organisations have been building over the past 25 years are being challenged by the increasing move to a more cloud-based environment and automated approach. Automating processes is a huge change for the industry, which is why it is so important to have clear direction and leadership from the top. There are different ways of approaching the change so it’s important that whichever route each organisation chooses to take, it’s consistent throughout. For example, you could approach automation from a ‘if you’re automating anything that’s good’ angle. Similar to how security teams approach a task or challenge, trying out the technology even if it means failure, is a learning curve and people will therefore learn quicker. The other approach is to be very targeted with what is automated. A big benefit of automation is the cost saving element so automating everything, even the elements that aren’t business imperative, could save time and money. Evaluating how to approach automation right from the beginning is important and needs to be centrally driven.
It’s also important to remember however that any change within a business, whether it’s big or small, impacts people and culture as well as processes and systems. Often, organisations forget that, for a digital project to work successfully, they must get people bought into the technology. Introducing new technology is as much about managing people as managing the implementation. The majority of organisations that bypass consulting and training employees more often than not don’t see the benefits that they expect.
This is particularly relevant in the financial services industry which still relies on legacy mainframe technology. Many in the IT teams have skills associated with these legacy environments and are often sceptical or resistant to any new technology. It is the organisation’s responsibility to ensure that employees are given the opportunities to upskill themselves for new solutions so that they don’t get left behind in the move to a more digital era. On the flip side, those with the skills in managing mainframes are getting older and it won’t be long until we lose them from the workplace through retirement. In an ideal world, financial services will have moved away from mainframes by that point but if not, they need to ensure that the necessary skills are still present within the business.
Change is disruptive and if managed badly, with little direction and leadership, can leave a sour taste. Now is the time for the financial services industry to ensure that the necessary leadership is in place to ensure that it can really see the benefits that technology can provide.