BID® Daily Newsletter
Oct 22, 2009

BID® Daily Newsletter

Oct 22, 2009

THE CHIEF INFORMATION OFFICER


Chief Information Officers (CIOs) often get a bad rap. Maybe it is because some use terms like "domain server," wear pocket protectors or interact better with machines than with people. Top notch CIOs however, could not be further from that stereotype (well most of it anyway). A strong CIO knows they are a partner to business units and technological support is critical to improving long-term bank success.
A good CIO knows their job is to align technology with business needs. They focus on bottom line revenue, controlling risk, new product development and other factors to help the company attain its goals. By working with both internal and external customers to support and build the business, the CIO is critical to any decent banking operation.
A good background in security is also important. For instance, did you know that a 2008 Security Management magazine study found that 22% of all goods and services for sale by cybercriminals are bank account details? That is a major problem, but it points out how critical it is to have a strong CIO with a good handle on security.
For bankers, this time of year is usually budget time. In anticipation of very interesting discussions this time around, we share with you a survey released by Aite Group related to IT. The survey found that 72% of bank CIOs expect their 2010 budget to be flat or slightly lower than this year. That means technologists will have to do more with less and bankers will have to expect project timelines to extend (the less money there is to go around, the slower the rollout of new products, security and other IT-related projects), so patience across the bank will be important. As a result, it also makes critical sense for CIOs to manage expectations, continually provide an update on the top 10 projects in motion and timelines for completion. For bank management, expect to do more with less, so continually challenge the risk/reward tradeoff of any new technology project and prioritize, prioritize, prioritize to achieve the best results.
Banks that really want to move into the top echelon of technology prowess during the budgetary process this year should consider shifting to zero-based budgeting (build each project from the bottom up staring with zero and fully allocate resource costs, etc.) and challenge the expected value of launching or supporting existing projects.
On the service side of the fence, remember that IT supports customers inside and outside the company. To step into the big leagues, CIOs should focus ensuring a same-day rule to get back to all customers, while providing ongoing feedback and insight into problem resolution. Customers don't care whether or not you have the staff to respond, they just want a prompt response, resolution timeline and follow up. Do that and you have set the tone for a strong IT team and a cohesive support platform all customers will come to enjoy.
The best CIOs follow the rules above about issue resolution and budgeting, but they also create synergy among customers and business units. These CIOs focus on understanding product manager needs and providing an efficient solution within a proper risk management framework.
Given stress in the banking industry today, strong CIOs know they need to provide guidance to business units now more than ever, while focusing on creating a long-term vision that is deeply embedded into the overall bank strategic plan.
Technology is ubiquitous in banking and it is only getting more so, as the rate of change rises and client demands continue to increase. It is critical that CIOs continually challenge business units, innovate, manage risk and help the company achieve corporate goals if the bank is to maximize its opportunities.
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