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Forbes Insight CIO Study, The Vision Quest of Financial Services CIOs

CIOs of leading financial services organizations have moved well beyond responsibility for operational excellence alone. And many have already begun boosting qualities and capabilities to ensure they’re prepared to be an effective Financial Services CIO of 2025.

Vision is what counts today. Because of it, financial services CIOs are expected to be business luminariesfirst, technologists second. At a time of intense—and chaotic—industry reinvention, these are the leaders tasked with judging which of the many possible technology-fueled business paths to take to ensure future as well as current success.

Financial CIO responsibilities have increased by orders of magnitude, and the accompanying risks—both professional and personal—are significant.

A recent Forbes Insight CIO study sponsored by VMware found:

  • 81% of financial services CIOs are primary drivers of innovation for their firms
  • 67% already sit on their boards of directors
  • 70% believe they will be responsible for overall corporate strategy within 5 years
  • 50% expect to be CEOs by 2025

To achieve their visions for the future, financial CIOs must take the helm of both technological and cultural change for what are often global organizations. This is no easy feat. So let’s dive into the changing nature of the role of the financial services CIO and what’s now required to be successful.

Leading with technology

No other industry is as enmeshed in technological innovation. Traditional financial services products and services—from bank accounts and insurance policies to stock market transactions—are now digitized. And new ones are being made possible by emerging technologies such as artificial intelligence (AI), machine learning (ML), and Internet of Things (IoT).

Here are some examples:

  • A major credit card company used AI to better detect fraud and was able to garner  $151 million in loss savings in just three weeks.
  • A leading auto lender cut its losses by 23% annually using ML to more effectively evaluate borrower risk, by using more—and more unstructured—consumer data points.
  • Payment device companies have developedlow-energy IoT Bluetooth beacons that can be used for mobile payments, replacing traditional (and costly) point-of-sale technology, shortening checkout lines and streamlining the shopping experience for consumers.

Assuming broader corporate responsibility

Spurred by digital successes, other C-suite executives are increasingly approaching the financial services CIO for help within their domains. That’s why more than three-fourths (76%) of financial services CIOs are key decision-makers on overall corporate strategy, reporting directly to the CEO. Approximately the same proportion (77%) also are primary decision makers for corporate acquisitions. This is a huge deal, as the market for financial services firms to acquire pre-IPO financial technology (fintech) companies is extremely heated.

It’s not surprising then that CIOs are anticipating getting tapped for even more responsibility. Specifically, they expect to be asked to make money rather than just run IT cost centers. More than half (56%) expect to head profit centers within 5 years.

How? By innovating across areas. New payment methods. New financial instruments. New digital services to keep customers engaged. Indeed, 6 in 10 (59%) financial CIOs say technology will drive “large” or “very large” changes in their product development strategies.

Evolving the organizational culture

At the same time, financial services CIOs will be tasked to manage the cultural revolution taking place.

For example, as IoT, AI, ML, and other technologies alter how financial services professionals work and interact—with each other as well as clients—enabling humans and intelligent systems to work better together to complete complex tasks will be critical. And doing it well will require training, collaboration, handholding—and patience.

Getting employees to buy in and collaborate is the single most important factor in whether a digital initiative will be successful. The Forbes Insight survey reveals the second most critical factor is integrating new technology with multiple existing systems. Achieving a smooth transition out of legacy systems is a close third.

Financial services CIOs stress this last point because of the increasingly digitized nature of the products and services they offer. Technical debt—that is, old technology that is not feasible to eliminate for whatever reason—is an enormous burden in any industry but possibly is worst in financial environments because of the fierce competition from both traditional and upstart players.

This makes the CIO’s vision even more important—to avoid purchasing innovations that might look promising, but which ultimately lead to technological dead ends.

Choosing the right partner

According to the survey, success also depends on having the right help. More than one-third of financial services CIOs (34%) believe that working closely with technology partners and using partners’ professional services are the biggest determinants of a technology project’s success. By working and collaborating with trusted partners, financial services organizations can explore the potential—and limitations—of leading-edge innovations, and come out the other side of digital transformation with high-ROI solutions.

To learn more about the Financial Services CIO of 2025, download the full Forbes Insights report.

To learn more about VMware Financial Services Solutions click here.

 

 

 

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