In today’s talent market, there are plenty of job postings and headhunters seeking “experienced CIOs.” While experience is a critical ingredient for the top technology role, it’s important to recognize that decades of experience translates to a leader who grew up in the “tactical” era of technology.
The operational world of cash, checks, deposit slips, passbooks, and teller terminals used to dominate bank tech budgets. Those were the days of green screen cores and server-based ancillary applications, and digital banking was a Star Trek thing of the future. Today, banks have no choice but to look more like tech companies: tech companies are offering banking services, innovative financial institutions are deploying banking as a service (BaaS) offerings, and digital transformation is dominating the strategic priorities of most financial institutions.
In the midst of this rapid-fire disruption, chief information officers are expected to be nimble, forward-thinking leaders who foster innovation in their organizations. However, in order to address this leadership mandate, CIOs must break through the tactical mindset and focus that consumes most hours of their day. Simply taking orders, fulfilling requests, managing outages, and measuring service levels—important responsibilities for sure—will not position the CIO nor the financial institution for success.
CIOs may seem a bit harried and frustrated today as they face three critical challenges as leaders:
CIOs are expected to be able to leverage and deploy myriad state-of-the art digital solutions, including digital banking, cash management, online deposit and loan account opening, next-gen payments experiences, and remote employee access to critical systems. They’re meant to be able to deliver data governance, meaningful analytics, and dashboarding to help the executive suite better manage and grow the financial institution. And, they’re supposed to have the skills and the tools to evaluate and deploy leading-edge offerings like BaaS and software as a solution (SaaS). Oftentimes, bank leadership has issues setting priorities, and the CIO ends up stuck between politically powerful executives competing for resources.
Many organizations lack the talent necessary to deploy, manage, and maintain the aforementioned technologies. In Cornerstone’s What’s Going On In Banking report, 67% of surveyed bank executives listed the ability to attract qualified talent as their top concern in 2022—up from just 19% last year. A national unemployment rate of 3.6% and a shocking 1.3% unemployment rate for I.T. workers make the job of recruiting and retaining professionals a constant challenge.
Emerging technologies call for a new breed of professionals who can properly implement these solutions while managing the ever-growing cybersecurity threats that plague any organization. Many CIOs realize they will not be able to support their bank’s strategic plan unless they develop and “build” some portion of their I.T. team while also “buying” new competitive talent in the market.
The past few years have caused all organizations to think and work differently. An unprecedented level of pressure has been put on the CIO to fulfill three critical mandates:
In the face of these and other, unpredictable challenges, next-generation CIOs must press into a very respected and intentional role as business leaders. It won’t be enough to have a skilled and agile I.T. team—CIOs must be the catalyst that drives the creation of a skilled and agile enterprise. Here are three hats the new CIO will need to confidently wear to be positioned for success—today and into the future.
The CIO must be a technology strategist who can align the financial institution’s technology plan with its strategic plan, and then gain buy-in from the bank’s leadership team. This starts with a properly chartered technology steering committee that is chaired by the CIO and includes representation from the executive team, lines of business, and even board members.
To be an innovation leader, CIOs must become energetic “scouts” for the organization, seeking out new state-of-the-art solutions, recruiting and aligning top talent, and crafting smart partnerships with fintechs and major technology vendors. Importantly, the CIO must have effective negotiation, relationship building, and even “storytelling” skills to craft a technology vision that wins the support of the bank’s board and executive team.
The role of CIO requires high intelligence and the ability to learn quickly across both the technology and business domains.
While next-gen CIOs cannot possibly be experts across all areas of technology, they will need strong domain knowledge of enabling technologies and industry vendors/solutions to manage both the alignment and execution of the I.T. plan. The next-gen CIO will understand how to bring his/her leaders together across enterprise architecture, infrastructure, applications, data, security, and program management to move quickly while ensuring that the quality and resiliency of the bank’s technology environment is enhanced. Like a crusty flight director in a NASA command center, the CIO must push their team of technical experts effectively toward achievement of the mission.
In addition, CIOs must know enough to be dangerous about the businesses they support. Whether its retail, commercial, mortgage or wealth management, CIOs must understand major products and processes and how their bank seeks to differentiate itself competitively. They must be able to consult with lines of business on how digital, data, and automation can improve the customer experience and increase efficiency, and they must be gritty and pragmatic enough to gain the respect of these front-line teams.
The CIO will always live in a world with a limited supply of resources coupled with insatiable demands for those resources from their business partners. No bank will successfully execute a strategic transformation without a disciplined capability to say “yes” to some things and “no” to many others. Whether it’s budget dollars or staff time, the CIO must play a critical role in aligning resources toward the most pressing business outcomes of the organization. The role requires tough conversations with business areas concerning the business case for new initiatives and the resource commitment to successful execution.
Next-gen CIOs cannot fulfill this leadership role alone. They need to have skilled resources that can manage all of the institution’s technologies, including a chief technology officer who owns and manages the infrastructure, networks, and lines of business applications. In addition to a qualified CTO, the CIO must have resources that understand and can manage day-to-day operations, including data governance, vendor management, security, risk management, and tactical technology issues.
These resources must also possess the management acumen to execute properly—they cannot just be “gearheads” or the CIO will get perpetually dragged into tactical issues. With a stronger I.T. leadership group, the CIO can focus on the strategic alignment of technologies and truly transforming how the bank operates.
While there is no hope for today’s CIO to have a predictable and orderly (or even sane) management role, these leaders have to transform their role effectively in order to help transform their banks. By effectively balancing the roles of innovation leader, domain expert, and enterprise resource manager, the next-gen CIO has a better shot at managing the chaos of strategic and technological transformation. By breaking the tactical barrier, next-gen CIOs can help their organizations become next-generation financial institutions.