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The advancement of technology has also brought some significant challenges. CIOs in banks are required to identify and prepare for these challenges. Being a CIO of financial services provider has become challenging considering today’s data-driven and hacker plagued digital arena.
A Chief Information Officer (CIO) is a corporate executive who is the in-charge of information technology strategy and implementation. The CIO analyses how emerging technologies benefit the organization or improve an existing business process.
As technology is advancing day by day, it is also reshaping industries globally; therefore, the role of CIOs have become more significant than ever. We are looking at digital innovation in the banking sector, and amidst these CIOs are expected to lead from the front.
CIOs may play a more prominent role, from ideation and piloting, through deployment. They require being at the forefront of the innovation, thereby consistently adding value to their organizations like banks.
In a recent survey, it was found that half of the global CIOs have either changed or are in the process of changing their business models. This throws light on the fact of how significant their role has become.
Now coming to the main segment of this article, we find that in addition to ensuring that the financial institution is running efficiently, the CIOs face a number of technology and compliance-related challenges. These challenges are so paramount that if not addressed, it can cause a loss running into millions of dollars.
Some of the top challenges faced by CIOs in banks are as follows:
Banks manage a massive amount of consumer’s sensitive data; therefore, security and risk management is one of the top most concerns for CIOs. Ensuring Data Security and Consumer privacy is something that concerns CIOs considering the level at which threats are evolving.
The advancement in technology and digitization in banking has also opened a window for hackers which are used by them to infiltrate technology. Constant revaluation is now required to stay protected from such instances.
The banking sector requires complying with a number of government and industry regulations. Often times, the CIOs have to stay updated with the latest regulations at the same time adhering to them. Anti-money laundering compliances have taken a lot of attention from CIOs for years.
Cyber ransom threat is among the growing security concerns across the globe. Almost every day, we hear cases of individuals and companies falling prey to ransom tactics. The loss from such an attack can be devastating and may cause irreparable damage.
The bank CIOs must understand the present threat landscape and potential attacks to combat these cyber ransom threats. Preventive action is must be implemented so that the data is protected. Undoubtedly this is “the challenge” faced by the CIOs currently.
Recently we have witnessed the rise of business disruptors in the financial services; hence the CIOs are required to plan on what to offer in the future. It will be a challenge to deploy new technologies that can serve and streamline their customer experience. This is a difficulty that can be overcome and will facilitate in ensuring long term business viability.
Many banks are still using IT infrastructures that are built on outdated components and functioning with vulnerabilities. The challenge in this situation for CIOs is to know how they can upgrade and maintain infrastructures that can also help them to reduce security concerns.
It is essential to have the right skills to run your organization. Almost 93% of CIOs have faced the challenge of addressing the skills gap while being updated with changing technology trends. With the disruption triggered by emerging technologies such as AI, robotic process automation, etc. the CIOs should take the lead in vendor management. It will develop in-house skills and capabilities, thereby driving innovation and growth.
It is to be noted that merging legacy technologies with modern technologies without compromising on security or function will be a real challenge for CIOs in banks. Advancement of Fintech players is also a challenge for banks as now the banks have to come to a stage where they are either competing with them or collaborating with them.
Managing resistance from the internal culture is another crucial factor. The success of the digital transformation depends on the internal culture. The CIOs must assess the internal readiness for the transformation. It requires greater innovation, collaboration in banking, and technological confluence.
The change caused by the digital transformation has made the role of CIOs even more prominent. They have a task at hand of focussing on strategic business outcomes and bringing the financial institution more closer to its customers. Given the current situation where many countries reel from the aftermath of Covid-19, the next few months will be trying yet exciting times for CIOs.
Although challenges are many, they are not insurmountable. Hence how the CIOs play their role and given how they work hard to stay ahead will determine the future.
Also, read: Reasons for implementing the Digital Banking