In banking today, innovation is considered a good thing, something that banks want to achieve as they face new competitors, demanding customers, and expanding channels. But innovation hasn’t always been so highly valued, according to Frank Petersmark, a former insurance CIO who is now CIO Advocate with technology consultancy Xby2. The word’s Latin derivation means “renewed or altered,” he notes, and until the Enlightenment it generally had “negative connotations... because it was something you did not want to do” -- replace an established system or practice with something new and unknown. Innovation “implies change, which people don’t like,” he adds.
And even though today it is viewed much more positively, innovation poorly pursued still causes disruption without improvement. “Cultures of innovation aren’t created, they evolve,” Petersmark says. “You can’t just announce [an innovation initiative] and have the magic happen.”
Rather than trying to impose processes intended to spur innovation, management must “create an environment that allows innovation to occur and ferment,” he says. “It’s about helping people adjust their mindsets and attitudes to be more open to change. That means recognizing when change is needed and beneficial, and accepting the change when it occurs.”
[Corporate culture can be a springboard, or roadblock, to innovation in banking, says PwC’s Julien Courbe: IT Innovation in Financial Services: 2 Roads Diverged?]
Banking industry CIOs, whose roles have undergone dramatic changes -- from back-room techies focused on development and maintenance to strategists who must juggle core technology expertise with budget mastery, talent development skills, analytics know-how, and R&D insights -- are playing a critical role in creating and optimizing such cultures of innovation at their institutions. Successful innovation isn’t specifically about technology. But because innovation inevitably changes the ways people work, interact, learn, and transact business, it’s unlikely to occur without the very smart application of digital systems and tools.
This is a reality recognized and embraced by Bank Systems & Technology’s 2014 Elite 8 honorees, who are profiled in an exclusive digital issue. They have navigated the sometimes murky waters swirling around innovation, disregarded the hype, and zeroed in on the opportunities for their IT organizations to improve performance and drive growth. Whether it involves a core systems replacement project, post-merger systems integration, expanding mobile and digital capabilities, or pursuing the operational opportunities around cloud and virtual infrastructure, this year’s Elite 8 executives not only do not fear change -- they are able to marshal their considerable leadership abilities to get their teams to embrace it (or at least work with it) as well.
Just as the best bank CIOs never have viewed technology as an end in itself, the 2014 Elite 8 understand that effective innovation must be about changing business for the better. Congratulations to the Class of 2014!
Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio