Financial services CIOs not spending enough time on customer-facing innovation - study

Financial services CIOs not spending enough time on customer-facing innovation - study

Despite a desire from financial services firms for growth-driving customer-facing IT innovation, CIOs are stuck focusing on organisation and business processes, according to Diamond Management & Technology Consultants.

For its Diamond Digital IQ study, the firm surveyed 724 senior business and IT executives - 160 from financial services firms, covering retail, commercial, and investment banking.

While 74% of financial services CEOs and business leaders are "active champions" of technology, and many of these firms rally around innovation strategies, only 24% of the CIOs are primarily responsible for customer-facing technologies.

According to Diamond, its survey results seem to imply a shortcoming of the CIO, with the role weakening precisely at a time it should be growing stronger, given the advent of new technologies that could potentially improve business more than at any time since the emergence of the Internet in the late 1990s.

Jeff Hesse, MD, financial services, Diamond, says: "Technology can be the engine behind increased profits, loyalty-building customer experiences, and the ability to navigate today's dynamic regulatory environment. The CEO who isn't leveraging and demanding more market-facing innovations from the CIO, and the CIO who isn't engaging in and driving these strategies with business leaders, are both missing the mark."

CIOs fill both "staff" and "line" roles, says Diamond. In the staff role, they have to provide the information to control the business, comply with regulations, and measure performance. Meanwhile, in the line role, they have to drive productivity, increases sales, and helps foster innovation.

Chris Curran, CTO, Diamond, says: "Financial services executives we surveyed put 'leadership abilities' and 'innovative thinking' at the top of their IT executive wish lists - much higher than 'deep experience in running IT operations'. The business clearly wants the CIO to drive growth as well as lead the IT function, but it appears the vast majority of these CIOs focus mainly on improving the IT organisation and business processes."

Comments: (1)

A Finextra member
A Finextra member 05 October, 2010, 13:35Be the first to give this comment the thumbs up 0 likes

For me building customer loyalty is all about building engaging experiences and cultivating trust.

To understand what this means to your customers/users, you have to understand your customers and what's important to them.

We uncover the goals and motivations of our customers through contextual studies and forensic Usage Centered Design, but this is still only part of the picture... We always consider: IT + business goals + user needs, to balance innovation that delivers both customer and business benefit.

This UX trinity is at the core of our customer-facing innovation process in creating loyalty-building customer experiences.