Technology leaders in financial services are being challenged by the fast pace of technology change, but they are also able to see the opportunities opening up. As JP Morgan’s Jamie Dimon emphasised in his now infamous 2015 CEO letter to shareholders: Silicon Valley is coming.
Dimon didn’t wait for new fintech firms to disrupt the business but took the fight to them. In 2015 he set aside a tech budget of more than $9 billion and his 2016 CEO letter detailed the strategic importance of innovating. As CEOs continue to recognise the importance of disruption CIOs will come more significant in helping shape this agenda going forward. The CIO’s knowledge and expertise across the business will be vital in providing an understand of how best to adapt to this change in financial services.
While change is possible for large financial services organisations, it is also extremely difficult. Many leaders in financial services organisations want to drive this technological change and see it as an opportunity for growth, but face a number of challenges.
The age old problem of finding the right talent to drive technological change is key within banking and financial services. In order to attract the right talent to your organisation, you may have to change the way talent is found. This evolution puts greater emphasis on the role leaders can play as recruiters through advocacy. Every talk, every conference and every media piece positions leaders as advocates of the brand. In addition it is important to remember that the right challenge will attract the right talent.
The companies that hire the best talent will in turn be able to build better products and services for their customers and business – and effectively adapt faster to change.
Finding the right technology partner can take time and the old saying that nobody got fired for buying (X big tech provider) can mean that the temptation to go with the same solution persists. However the growing number of fintech companies is giving financial services a greater opportunity to build better products that their clients want – and often much faster.
Conducting deeper research into available vendors will allow partnerships to flourish across finance and technology. Yes smaller players need to adapt to work with larger financial services companies but procuring from smaller companies is a key part of keeping up with the technological change. HSBC is one large incumbent bank actively engaging with technology leaders, recently announcing its technology strategy board.
Adapting to regulation
Regulation across financial services provides another opportunity to drive change within an organisation using technology. From the incoming Payment Services Directive 2 (PSD2) across Europe and the open banking standards in the UK, financial services companies need tools to help them move faster to solve their compliance challenges. Solving regulatory challenges in cost-effective and secure ways is vital. Adapting to an increasingly complex regulatory environment creates an opportunity if implemented well.
Change is hard and financial services companies will need to continue to evolve in a fast-changing business environment. With the right talent, partnerships and organisational input, success is possible. How each leader seeks to adapt to this change will separate the winners from the losers.