CFOs have changed, and so should technology at banks

Technology has turned into a crucial investment sand-clock. It is not enough that it is cutting-edge, advanced and game-changing in terms of IT. It has to be equally strong in delivering some semblance of returns, and pretty swiftly at that. Just like any high-stake acquisition decision or a portfolio of finance options, a technology bet is supposed to be strategic, future-forward and packed with ripe ROI lifecycle as well as a good cost-gain trade-off ratio.

Some CFOs have always stuck to their obsession for numbers and have often demanded the IT office to convert costs into revenue or some usable raw-material for the balance-sheets.

Today, this breed is growing and hitching their wagons to those who inhabit IT department; because, in short – technology has redefined how banks and financial entities think, execute and gain from this business.

A 'not so Bearish' scenario

As not so long back as in 2012 we saw Gartner's FEI survey of CFOs hinting that CFOs were focusing on business analytics and business applications more than on technology. We saw that information, social, cloud and mobile technology trends were already beeping high on a CFOs' radar.

That time, some 63% of CFOs were reported to have plans to upgrade business intelligence (BI), analytics and performance management and about 92% of CFOs believed that IT doesn't provide transformation/differentiation). The survey had also underlined IT was being graduated from being a support tool to being a business enabling and a business creation tool.  Circa 2014, and the survey moved to findings like cloud use and projections getting doubled from 2013 for many finance-focused applications, and 81 % of organizations forecasted a move to the cloud for more than 50% of their future transactions. In terms of top technology investments, BI and Risk/Compliance made their way on the top five ladder, rubbing shoulders with Enterprise business applications and Security investments.

Understandably today, analytics, BI, risk management and compliance are the cornerstones of any CFO-CIO conversation and a CFO expects, and fairly so, that technology delivers the buck for the bang it has been so chirrupy about.

What makes a CFO tick today?

A CFO is not the species anymore to whom you presented a technology idea painted completely from a cost angle only. The CFO mindset now requires more than a cost-sheet, it demands a clear, specific and time-bound sketch of where and how can technology help touch the actual 'moment of truth' with the customers, and hence, revenues and market penetration metrics.

Analytics for instance, is something where you cannot satisfy a CFO with some run-of-the-mill BI wrapping. The CFO would no longer be satisfied with yesteryears' shells anymore; s/he would soon expect and demand you to dig out black boxes from deep market sea beds and fish out whales from far beyond. All this is happening because there is a new deluge of opportunities to finally convert all that IT noise and apparent rubble into something which is not only precise, substantial but also revenue-oriented. In fact, when a CFO urges technology to deliver more than a common denominator, there is a pea of sense in that pile of lists. Whether it is social cackle or unstructured chatter or CRM juices, a new set of digital eardrums is vital for banks that are trying to compete futuristically.

Laughing all the way from and to the Bank

The unprecedented ability to bake business insight into customer analytics and risk management can allow banks to even monetize data and work a new lifecycle of higher revenues, better customer service, stronger risk management, and improved operational efficiency. Add customer centricity to this mix, and suddenly technology is not a cost centre any more.

It is a centre that can actually, to the shock and delight of many CFOs, drive profitability and customer retention through a better grip on customer profile, demographics, products etc and a never-before possible format of actionable, beautifully-visualized data. Power BIs, particularly ones powered on Cloud enablers like Azure make an entire ocean of data well-potable and well-bottle-able.

Extend this thought into bigger realms of segmentation, profitability, and sentiment buckets and you may already find people using self-service BI in Microsoft Excel and Office 365 and combining information from social channels with internal data. Banks are no more ivory towers of money but are now very much in step to understand and improve brand perception, leverage analytics and office productivity tools towards better, durable revenue streams.

Risk-proof buckets

While technology continues to advance and sharply evolve, banks are also taking cognizance of balancing the beast and the beauty well.

CFOs are rightly stressing on the imperatives of better risk management and measurement. A number of unfortunate incidents last year itself have been ample to demonstrate how the financial industry stands more vulnerable to a growing breed of threats and consequentially, new regulatory pressures. Microsoft solutions are aptly helping financial institutions identify, organize, and evaluate risks more effectively by providing risk managers with a set of familiar tools that offer unique capabilities to interpret the impact of risk. Many banks, similarly, are using a smart alloy of Office 365, SQL Server; and welding them on Microsoft Azure to drive this new digital road.

The CFO-CIO Handshake

It appears crystal clear now that a CFO is not someone whom you visit to veto a technology choice after you have decided your options. A CFO is now someone who is not just integral to the evaluation of those investments from the consideration stage itself but also happens to have the right ratio of examination lens, demand and expectation to pick the most pertinent technology for a bank.

What is the most striking part in this new avatar of a CFO is that the ancient-not-so-sappy equation between CFOs and tech teams has changed for good.

Recently Gartner had unequivocally supported the creation of this "bimodal" IT organization - the "enterprise-strength IT," which is responsible for delivering efficient IT services with high levels of excellence and reliability; and the "opportunistic IT," which is ready to take advantage of new business opportunities, with the creation of new business models and seizing elusive business moments.

If you have been able to distill the final one-liner wisely – here it comes – IT strategists have a never-before opportunity to partner with and delight the CFO Captains. Grab it.