3 Challenges Facing Financial Services CIOs in 2014
CIOs and CTOs are accustomed to living on the cresting wave of the latest technology. Those in charge of data networking and technology infrastructures of banks and financial institutions, however, bear a special burden. Not only are the business models, regulatory climate and customer expectations of the financial sector fluctuating faster than the stock price of the latest tech startup, their dilemma is far from abating.
Here are three key challenges for bank CIOs in 2014:
#1: Changing Customer Demands
New segments of customers are becoming more tech savvy by the day, and all are demanding a banking experience that is seamlessly integrated with their digital life.
More than 20 million new, mobile consumers are expected to enter the market for banking services over the next 4 years, according to Deloitte. 51% of US adults are now banking online, and making mobile payments, and 32% are banking via their mobile phones. As digital touch points are added, and transaction methodologies multiply, the data landscape of banking IT services becomes more complex.
Mountains of structured and unstructured data are flowing inwards, creating new infrastructural demands, while simultaneously opening the floodgates of Business Intelligence opportunity. 88% of banks agree that analytics will become more important in the next three years, and 70% are already leveraging big data—although admittedly not to the best of their ability.
In order to best service a new generation of mobile consumers, while capturing BI opportunities, CIOs in the Financial Services industry will need to look to the cloud for solutions. Cloud computing and hybrid solutions not only offer CIOs help in handling the challenges of Big Data, they also offer the opportunity to offload concerns about hardware, allowing CIOs to instead focus on data strategy.
#2: Security Threats
Although most CIOs would now agree that the benefits of the cloud outweigh its drawbacks, the challenges of protecting consumer data in an increasingly virtual environment, under heightened government regulation and public scrutiny, are real. 60% of banks worldwide will be processing a majority of their transactions in the cloud by 2016, increasing their vulnerability to attack.
In response, a whopping 94% of banks across the globe are maintaining or hiking cyber-security investments to remain secure in a new cloud world order that’s seen a 169% increase in the average number of detected incidents in the last year alone.
As the ability of hackers to subvert security measures becomes more sophisticated, Financial CIOs are expected to develop agile solutions that protect customer information while minimizing the investments required. This is requiring CIOs to juggle solutions, resulting in a hybrid model that combines private and public cloud with on-site data storage and management solutions. While 71% of financial services firms are expected to invest more in cloud solutions in 2014, a solid 51% are also enhancing their own infrastructure as well.
#3: Rising Expectations at Work
Expectations for CIOs in all sectors of business are shifting fast. Company leaders are expected to keep pace with the exponential growth of devices, data delivery methods, and bandwidth-intensive applications—while maintaining support or developing transition plans for legacy systems approaching obsolescence. With a complex IT portfolio, a heavy load of application activity and data traffic, and an increased dependence on the cloud—CIOs must start rationalizing their infrastructure and establishing reliable, secure, connectivity solutions to ensure uninterrupted access to mission critical information. High percentages of uptime and big bandwidth are no longer a source for praise, but rather a universal expectation.
The good news is that IT services are increasingly being outsourced, helping CIOs shift their capabilities along with expectations. By outsourcing, they can:
Eliminate dependency on obsolete infrastructure
- Future-proof infrastructure with agile solutions
- Move expenditures from CapEx to OpEx
- Reduce compliance and regulatory risks
- Capture competitive advantage by focusing on core competencies