The shifting priorities of CIOs in 2018

By David Beach | 6 November 2017

Whilst this last decade has been anointed with grand, sweeping titles, the fact remains that society is changing irreversibly. Historians of the future will look back on the post-noughties as the dramatic information shift.

First, we developed the hardware, with the rise of Jobs and Wozniak, then we developed the software, and now we’re putting that enhanced software to universal, industrial use. We’re following the same procedural steps as the last industrial revolution, ony this time the revolution is digital.

It can be argued that nowhere is this more evident than financial services, as executives are embracing digital transformation in their industry, according to the latest Gartner Survey. The C-suite roles are changing fast as companies survive, adapt and thrive in new economic and cultural environments.

We first saw this with post-2008 regulatory changes and the subsequent change in the role of the CRO. The CIO now faces a similar change, as the tech landscape begins to move ever-closer to the real life applications of previously sci-fi imagined technologies; perfectly encapsulated by the meteoric rise of bitcoin underpinned by blockchain technology.

With new tools at their disposal, the future capabilities of the CIO should be viewed as one ripe with opportunity, even if that opportunity is hard to find through the noise. Sorting the hum of sustainable and far-reaching technology from the short lived and impractical buzz of the so-called buzzwords is critical in investment decision making.

The 2018 Agenda for CIOs - breaking down the Gartner report

How to sort the gold from the grit requires careful panning which may explain why the 3,160 CIOs placed analytics (26%), digitalization/digital marketing (21%) and mobile applications (11%)  in their top 10 techs to win above any of the new buzzwords of fintech. Those buzzwords include AI, which does appear as a higher priority with banking CIOs (8%) than across other industries (5%). As expected with PSD2 on the horizon, APIs (4%) and omnichannel (3%) are present as a priority for banking CIOs.

The Internet of Things (IoT), whilst a priority for other industries (6%) did not feature for banking or investment services. One would hazard a guess that IoT remains an important consideration for insurers, with the rise of telematics evidence of this. Blockchain did not feature at all as a top 10 tech to win for banking or investment services.

Blockchain absent from CIOs priorities

As of October 2017 when the survey was compiled, CIOs were not taken with blockchain. Indeed, blockchain placed 20th on their top 10 techs to win. It suggests that the average banking and investment CIO has not been drawn in by the hype surrounding bitcoin or promises of a decentralised ledger. Whilst blockchain is likely to outlive bitcoin, the chances are banks will be reluctant to pump the R&D money necessary to make blockchain fit for banking purpose. There is no doubt that blockchain will become the future of record keeping, but the processor and data capabilities required to keep up with the Right-Now economy, will hold off implementation for the foreseeable future. That’s not to say that journalists and theorists can't postulate on potential uses, but for the time being CIOs have other technologies with which to engage.

What does this mean for collaboration?

Does this mean that CIOs are completely ignoring new technologies? Of course not. AI and machine learning have their place in the modern financial sector, but wholehearted embrace from legacy banks remains a step too far. That’s not to say that those same banks are not keenly interested in new technologies as the increase in accelerators and incubators attest, whilst legacy collaboration with start-ups is the most likely introduction of emerging technologies into mainstream markets.

As Senthil Ravindran, EVP and Head of xTech Labs at Virtusa, points out “New disruptive technologies – such as AI/machine learning, robotics, AR/VR and blockchain – are building on the foundations laid by technologies like mobile and cloud, and beginning to impact legacy banking business models. While some of these technologies are still in the early stages, we are seeing early adopters even amongst the large, established banks build new business models around these technologies.”

But the hierarchy of technology or, rather, the hierarchy of risks that match those technologies, largely dictates a CIO's investment strategy.

Digital security still a major priority

Indeed, CIOs are focusing on readily available technologies for immediate solutions to pressing short-term difficulties. The recent wave of data breaches, as well as ransomware and other insider hacks, mean that 71% of CIOs of all industries surveyed have already invested in security technology. However, the rock of regulation and the hard place of increased cyber terrorism, has left the bank squeezed in the middle.

It means that the IT budget is becoming more tightly squeezed to the point where CIOs increasingly have their hands tied with stingy spending restrictions. As former CIO of RBS Global Markets, Stephen Norman, told bobsguide: “It’s not just the CIOs.  The whole of the IT department are so busy simultaneously keeping up with the regulation which is squeezing their budget spend, and combatting short term threats they don’t have the capacity to develop ahead”.

Seniority: Included and understood?

The survey also revealed that CIOs were increasingly being involved in more C-suite conversations outside of their IT heartlands. The Survey compared CIO IT and executive leadership time from 2014 to now. Three years ago, CIOs were spending, on average, 105 hours a month on IT delivery leadership and 45 hours a month on executive leadership. Today, IT delivery accounts for 90 hours and executive leadership for 60 hours. It suggests that in a technologically changing environment CIOs are being included far more in business-wide discussions, and are an integral figure to future sustainability. 

However, Stephen Norman succinctly tells bobsguide in response: “There’s no point being a visionary CIO if the rest of the board doesn’t know what you’re talking about. It’s more about fostering a culture of technology in the boardroom and breeding a new type of board member who thinks in the digital and implementing a new digital-first culture.

“In days gone by, the CIO was expected by the bank to guide the business through new technology to better leverage the bank’s future products and services. But today, things are changing so fast that the banks that will be successful will be those where the business themselves understand what is possible and drive the technology agenda at the board level”.

Stephen Norman's first novel Trading Down, a fast-paced thriller providing an exploration into the increasing threat of cyber-terrorism on the modern world, is available to download as an eBook from November 9 2017.

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