Bank CIOs Must Combine Tech Expertise With Business Acumen
Q: What are banks looking for in a CIO today?
Craig Stephenson, Korn/Ferry International: Bank CIOs must drive intrinsic value across the enterprise by implementing strategic initiatives through sound business acumen and by capturing the maximum return on technology investments. Furthermore, competitive differentiation is apparent by CIOs driving business transformation and proactively addressing business requirements with forward-thinking IT solutions. The bottom line: Technology leadership should effectively manage expectations and collaborate to drive business results.
Judy Homer, JB Homer Associates: As banking has evolved into a highly audited and regulated industry, bank boards and senior management are looking for technology skills such as the ability to effectively manage risk and to adopt enterprisewide solutions for risk management and corporate governance control. When we evaluate banking industry CIO/senior technology executive candidates, some of the most important qualities we look for are a good understanding and grasp of the business and technical knowledge as well as being an enabler to business change and growth. Effective vendor management is another key quality we find essential in these candidates.
Andy Houghton, YSC: The senior technology lead is required to play the role on a broader stage today. Because the delivery of technology programs entails a high degree of complexity and risk, this broader requirement for CIOs has come to the fore only recently. Now clients ask us for people who can lead at an organizational as well as functional level. At the end of the day, however, the CIO's capacity to deliver a technology agenda that drives business success remains nonnegotiable, requiring CIOs to blend their specialist/functional niche with broader business leadership.
John Challenger, Challenger, Gray & Christmas: The biggest concern for banks these days is security, particularly for retail banks pushing online services. The biggest obstacle in convincing customers to make the switch to online banking is assuring them that their information and, more important, their money are secure. Banks want tech executives who will not only establish a high level of security but also develop systems and programs to train tellers, call center representatives and personal bankers on all facets of their security and how to relay that information in an easy-to-understand way to the customer. It is also critical that CIOs be able to communicate effectively, bridging the language and understanding gap that often exists between the business side and the technology side of banking.
Q: To what extent is the ability to innovate a qualification for today's senior bank technology executive?
Stephenson, Korn/Ferry: The technology function requires innovation to encourage unique business opportunities. However, the concept of bringing innovation to life in the technology function can be diminished by third-party vendors, cost pressures and business requirements. This changing dynamic requires the banking industry to place greater emphasis on a CIO's leadership characteristics and process management experience.
Homer, JB Homer Associates: Being an innovator and change agent are essential qualifications of a bank CIO today because the ability to provide innovation in areas such as online account control, wireless customer communication and RFID-enabled payment systems is critical to providing an organization with a competitive edge. As the heightened focus on global competition and business restructuring increases, innovation will become more prominent and important than in the past as banks have found a critical need to transform themselves into leaders in online, digital and on-demand technologies.
Houghton, YSC: Innovation without a clear commercial context holds little interest for banks. Understanding the latest technology purely for the sake of knowledge gets a prospective CIO nowhere. It is the ability to align technological insight with the commercial agenda that really counts. We also increasingly see banks emphasizing the CIO's capacity to develop a team that can innovate with the business.
Q: What are the biggest challenges facing today's bank CIOs? How are these different from the challenges they faced a few years ago?
Stephenson, Korn/Ferry: Over the past several years, the CIO has earned the recognition of an essential business partner. This is a positive development, but it provides a growing set of challenges facing bank CIOs. Effectively, the increase in scale combined with globalization poses a set of unique challenges. New areas of focus have emerged to include business alignment, service-oriented architecture and handling abundant customer data. CIOs are also grappling with corporate objectives, change management, recruiting/retaining top talent, information security and workforce demographics.
Homer, JB Homer Associates: The biggest challenges facing today's bank CIOs are a result of ongoing technological transformations, such as digitizing data and having an effective archival system to store and have accessibility to this data. This has led to an exponential increase in the amount of electronic data and the need for greater information security, ironclad authentication methods, fraud control measures and customer privacy issues -- all while remaining within federal compliance regulations. In past years, the biggest challenges bank CIOs faced were focused more in the areas of maintaining the technology infrastructure and driving IT toward being an integral part of the overall business strategy.
Challenger, Challenger, Gray & Christmas: The biggest challenges are keeping up with change, managing rising expectations and finding quality managers who not only have the requisite tech skills but can also understand and work around the bank's business goals. These challenges have always existed but what is changing is the pace at which CIOs must adapt. Changes are occurring much faster, and it is essential to keep up with, or even better, stay ahead of those changes.
Q: Are there any trends in terms of where banks are looking for technology leadership?
Stephenson, Korn/Ferry: Consolidation continues to create new challenges for technology leadership. Greater demands are being placed on CIOs to participate in management committee meetings and to create shareholder value. There is tolerance to consider talent from other industries, but the vast majority are experienced technology executives from banking or transaction-related banking businesses. CIOs who possess a demonstrable track record with the requisite business acumen will continue to be in high demand. As a result, we stress the importance of early succession planning to our clients.
Homer, JB Homer Associates: Although we generally have found banking CIO candidates from the banking and related financial services industries, it has been our experience to also uncover candidates from other industries. In one recent instance, we found a highly qualified candidate from a leading national retailer who had done some interesting things in cross-selling, e-commerce, supply chain management and high-volume transactions. These skills -- along with being a strong leader, creative and process-driven -- are key skills that are generally transferable to any industry. As the competition for talent increases, banks should seek highly skilled candidates from a variety of industries across all borders.
Challenger, Challenger, Gray & Christmas: Finding a CIO within the banking industry might be beneficial in terms of his/her knowledge of the industry's unique challenges. However, in the quest for innovative approaches and as banks increasingly rely on Internet technology to attract customers, some banks are undoubtedly finding it advantageous to bring in tech executives and CIOs from outside the banking industry. These individuals offer a fresh perspective and are less likely to be constrained by the prevailing industry trends.