As data growth continues unabated and cost pressures continue to pile up with increased line of business demands for IT agility; the CIO in financial services is at a crossroads.
Couple this with the need to make bold and big bets in strategically important business areas like Risk Mgmt, Compliance, Trading systems etc you have all the makings of a perfect technology storm.
Figure 1 – IT is changing from service provider to service partner
As Brett King notes in his seminal work on Bank 3.0, this is the age of the hyper-connected consumer. Customers are expecting to be able to Bank from anywhere, be it a mobile device or use internet banking from their personal computer. IT is thus advancing enterprise destiny than at any point of time in the past.
Thus there is significant pressure on Banking infrastructures in three major ways –
- to be able to adapt to this new way of doing things and to be able to offer multiple channels and avenues for such consumers to come in and engage with the business
- offer agile applications that can detect customer preferences and provide value added services on the fly. Services that not only provide a better experience but also help in building a longer term customer relationship
- to be able to help the business prototype, test, refine and rapidly develop new business capabilities
The core nature of Corporate IT is thus changing from an agency dedicated to keeping the trains running on time to one that is focused on innovative approaches like being able to offer IT as a service (much like a utility) as discussed above. It is a commonly held belief that large Banks are increasingly turning into software development organizations.
Figure 2 – IT operations faces pressures from both business and line of business development teams
The example of web based start-ups forging ahead of established players in areas like mobile payments is a result of the former’s ability to quickly develop, host, and scale applications in a cloud environment. The benefits of rapid application and business capability development has largely been missing in the with Bank IT’s private application platform in the enterprise data center.
Figure 3 – Business Applications need to be brought to market faster at a very high velocity
- Business process and workflow automation not only to remove the dependence on hardwired and legacy processes but also to understand and refine the current state of business processes
- In memory/Complex event processing capabilities to be able to detect and react to Big Data streams like social media feeds, payment data. The applicability of these technologies in areas like fraud detection has been well documented
- In the Data space, the burgeoning Hadoop space now provides abilities to leverage any processing paradigm from batch to interactive to real-time. Complementary technologies like data grids and data virtualization technology not only to do faster analytics but also to be able to provide regulatory and compliance related stakeholders with 360 degree views of customers. Such modern data architectures can minimize risk and maximize opportunity
- Open Integration that focuses on bringing together disparate capabilities across the enterprise
- Cloud computing as an enabler for infrastructure agility and application mobility. Be able to leverage a mix of private and public cloud capabilities in a secure manner.
- Platform As a service (PaaS) to deliver faster time to market and change to critical applications and business capabilities around X-as a service (XaaS)
A final word of advice in this age of cost cutting is for executives to look to leverage Open Source where possible across the above areas. The worlds leading web properties and Fortune 1000 institutions use a variety of open source technologies and have shown the way forward. Robust and well supported offerings are now available across the above technology spectrum and these can help cut IT budgets by billions of dollars.