Long reads

Demystifying the role of the fintech CIO

Hamish Monk

Hamish Monk

Reporter, Finextra

This series of articles looks to demystify the various C-level roles within fintech companies today – exploring the career paths taken by top managers, their critical skills, daily responsibilities and challenges, and even how the pandemic has impacted their understanding of running a successful business.

This fifth instalment in the C-suite Series examines the role of the executive responsible for bridging the IT-business gap – the chief information officer.

As a result of rapid technological development within the financial services industry in recent decades, the role of chief information officer (CIO) has surged in demand. Fintech businesses, in particular, are increasingly looking to CIOs to ensure their information technology systems remain up to speed, serve customers’ needs, and most importantly, keep up with competition. 

In the 1980s, the CIO’s mandate predominantly involved the maintenance of internal computers and databases. Since the 2010s, however, the remit has broadened, and postholders are tasked with identifying cutting-edge IT trends – such as cloud computing, big-data analytics, and robotic process automation – and investing in their implementation and maintenance.

In an interview with Finextra, Roland Anderson, CIO of TP ICAP Group’s data, analytics and post-trade offerings arm, Parameta Solutions, noted that a fintech CIO must act as a conduit between the business and the IT department, and identify technologies that serve to meet the C-suite’s company-wide goals: “The CIO is there to ensure you cut through the noise, and deploy technology that helps deliver on business goals and revenue targets,” he said. “That is important whether you’re a fintech unicorn, or an established firm. You're going to need someone other than the CEO or the COO to make strategic decisions.”

However, Anderson added that building technological processes and operations, using the team’s skillset, is almost the easiest element of the CIO role. The real value, he argued, comes in understanding a firm’s medium-term and long-term requirements, how IT systems can support them, and ultimately, bringing in revenue.

According to a 2018 Forbes study, which surveyed 400 CIOs around the globe, 40% of CIOs believe their function is becoming essential to successfully formulating customer-facing solutions, creating global capabilities, developing new revenue-earning opportunities, and fostering innovation within companies.

The remit

Before we dive into the day-to-day responsibilities of the modern CIO, it is important to define the scope of the post itself. According to McKinsey, there are three key vectors:

1. Reimagining the role of technology in the organisation

This means establishing the role of technology within the business, implementing a “tech-forward business strategy”, managing IT systems across organisational silos, and delivering best-in-class customer experiences.

2. Reinventing technology delivery

Companies, especially fintechs, need to be technologically agile in order to keep up with a rapidly shifting global marketplace. This means CIOs must continuously improve IT services with next-generation capabilities, such as “end-to-end automation, platform as a service, and cloud”.

3. Future-proofing the foundation

To keep up with the rest of the industry, a financial firm’s technological architecture must also be highly flexible, enable data ubiquity, protect systems through advanced cybersecurity, and be supported by modular platforms. This requires CIOs to identify the most appropriate IT partners that can ensure future-proof innovation – for the benefit of both company and customers.  

With the scope of the position outlined, the question that remains is, how does this overarching mission statement translate into on-the-ground duties?

In an interview with Finextra, Roy Aston, CIO of payments solutions fintech, Paysafe, said his responsibilities include running the 24/7 technology operation, managing cyber security, and devising global IT strategy to support the development of the company. In terms of concrete projects, Aston is currently working on the migration of Paysafe’s payments platform to the cloud.

“As well as technical and industry knowledge, you need to provide leadership to IT specialists and other staff within the company,” added Aston. “If I were to give advice to an aspiring IT leader, I would urge them to learn about the business and sector you operate in. Taking the time to understand the market, competitors, customer needs and expectations can help anyone in IT deliver relevant products and services that are transformational.”

Commenting on his own role within Parameta Solutions, Anderson noted that he has something of a hybrid function, due to the firm’s relatively flat structure: “Since we run market data technology for Parameta, as well as for the entire group, I get involved in a lot of the day-to-day support operations,” he said. “My team is responsible for the market data message that provides front office with price discovery, and their view on getting content to end clients. I'm high-level enough to be able to communicate with the business in a way that's relevant to them, but I also have enough experience in technology to be able to work with my own teams, and understand specific terms or challenges unique to various divisions within the firm.”

Clearly, the silos that once existed between the business and the IT department within financial firms disintegrated years ago. Today, IT teams and the C-suite are almost inseparable – especially when it comes to fintechs.

In order to excel within the role, a modern CIO must develop a deep understanding of how every department within her fintech operates, and in turn, identify and meet the technical needs of each team using a versatile set of communication skills.

This is borne out in the figures. According to Forbes, CIOs believe the most important personal qualities for the job today are leadership (39%), communicating and influencing (37%), and partnering with others (36%).

The background

So how does a CIO develop the soft and hard skills necessary to successfully plug the gap between the business and the IT department of a financial technology company?

Paysafe CIO, Roy Aston, was working with computers from a young age, having graduated from Birmingham University with a bachelor’s degree in Computer Science and Software Engineering.  “While at University, I spent the summer holidays working as a computer service engineer – visiting sites for the local government department, and fixing their IT systems,” he said. “I enjoyed the role and the variety of challenges each day would throw at me.”  

Aston’s real start in the financial services industry, however, was with Egg – a new UK start-up internet bank at the time. “I spent many years with Egg, moving through different development roles, writing software for all areas of the bank, and pushing the boundaries of innovation, until I became the overall head of development for all systems. At this point I realised I had really started my management journey, and developed aspirations to become a CIO.”

The first CIO role for Aston was with Barclaycard’s Consumer European businesses, where he spent several years cutting his teeth in various technology roles, before moving to Paysafe.

Parameta Solutions’ CIO, Roland Anderson, has also enjoyed a colourful career – having been a market data professional for over two decades: “I finished university during the dot-com explosion and started working for BT around what was to become their internet end-to-end process,” he said. “After that, I spent some time at Dow Jones Newswires, which involved dealing with content market data from the Wall Street Journal and Barron's. It was delivered via satellite, leased line and Integrated Services Digital Networks. I plumbed a lot of that feed into corporates like Daimler Benz.”

As the internet started to become more prevalent, and the world woke up to delivering content over internet traffic, Anderson developed experience in converting serial connections into Transmission Control Protocol (TCP) and IP-based feeds. “From there, I ended up within the Information Services division of ICAP – it was the precursor to what is now Parameta Solutions,” he added. “That is where I cut my teeth on OTC markets, market data content delivery, and getting it to the big vendors and sell-side banks.”

After gaining further experience on the electronic delivery side, Anderson moved to inter-broker dealer, Nex – acquired by CME Group in November 2018. Here, Anderson worked in the post trade risk and information division and handled content from the broker and trading platforms. Eventually, he moved back to TP ICAP, and in two years became CIO of Parameta Solutions.  

This kind of robust experience in computer science and software engineering is exactly what prepares prospective CIOs for their position in the C-suite.

The tests

Once a seat within the suite is secured, a CIO can expect to face a number of business-related challenges during her tenure – putting these hard-earned skills to the test.

According to Anderson and Aston, one of the toughest challenges associated with the role at a fintech company is keeping up with the rapid advancement of financial technology. Indeed, traditional operating models are proving ineffective at competing with cloud-native architectures – putting pressure on CIOs to continuously update firms’ IT systems.  

“In the 20 years I have been working, technology has changed drastically,” pointed out Anderson. “Back then, you needed an understanding of infrastructure, hardware, and software – I was crimping cables by hand when I started out. But we are now at a point where somebody with a decent grasp of coding, and an ability to leverage cloud environments, can execute an idea quite easily without having to worry about the things I had to consider five years in advance, such as storage, kit, and persuading the business the investment is sound.”

Aston echoed Anderson’s point that the biggest challenge for fintech CIOs today is keeping up with the pace of innovation: “What do we build internally? Who do we partner with? Who is innovating directly in payments or within areas close to our business that could help us deliver better products faster to market aligned to customer needs? These are questions our team debates almost daily, to ensure we are delivering relevant products to both our consumers and merchants,” Aston said.

To meet the demands of digital transformation in financial services, a recent global survey of 176 CIOs in the financial services sector, by software company Dynatrace, highlighted a need for greater collaboration between teams. Yet, while co-operation is critical when it comes to digital innovation, the survey also notes that only 18% of financial services firms today have a single platform that enables cross-team collaboration and a true understanding of IT’s business impact.

“Consumers are relying on online and mobile financial services now more than ever,” said Jason Tooley, VP EMEA, Dynatrace. “As a result, digital capabilities have become critical to driving revenues and enhancing customer relationships for banks, fintechs, insurers, and other financial services providers. However, the pressure that their IT teams are under to meet this demand for faster innovation and improved financial services experiences is outstripping what they can deliver. Siloed teams, a lack of cross-team collaboration, and the absence of a single source of truth all hinder IT departments from achieving business goals.”

To ease the burden on IT teams, and avoid stretching limited resources beyond their limits, forward-thinking financial services organisations are adopting new practices that rely on breaking down silos: 52% are adopting BizDevOps, 49% are adopting autonomous cloud operations, and 48% are adopting NoOps, finds the Dynatrace report.  

Such technological advances do more than just make fintech firms more streamlined; they have the potential to drive customer loyalty, free up staff to focus on more value-added tasks, and can even expedite other innovations across the organisation.

“At the moment, we’re investing in new data, risk and cyber technologies, coupled with a migration of our on-premises payments platform over to the cloud to drive a faster cadence of innovation and scalability,” said Aston.

“We are currently trying to execute a technological evolution – from DevOps to DataOps,” added Anderson. “In financial services, you are constantly being exposed to different forms of technology, particularly around data science principles and cloud. These are the techniques big data firms are using, such as Airbnb, Facebook, and LinkedIn.”

Clearly, competition in the financial services sector is fierce. Identifying and deploying cutting-edge technologies is the minimum requirement for keeping up with the pack.

The transformation

The effectiveness of every IT update – major or minor – however, depends upon the technology expertise of the CIO herself. With this in mind, it’s not surprising that technology has been the fundamental driver of change for the CIO remit in the last several decades.

The speed of the role’s evolution, however, has been increased exponentially in recent months as a result of the pandemic-induced national lockdowns – with more and more financial services customers looking for enhanced digital experiences.

Commenting on the impact of the pandemic on Paysafe’s business, Aston commented: “With the challenges the world has faced from Covid-19, the demand for digital payments and alternative payment methods – from both merchants and customers – has become far more prevalent. Our technology team has had to adapt quickly to support the needs of the business with its external focuses and with its internal needs in a pandemic context.”

Speaking to the impact Covid-19 has had on Paysafe’s internal operations, Aston pointed out that the business is digital by design, so senior management was not faced with the challenges other less agile organisations were, when it came to shifting from physical to virtual processes. 

“Flexible, hybrid or fully remote ways of working are here to stay for most organisations following the pandemic,” Aston said. “However, just because our colleagues, partners and customers may be behind a screen more now, it doesn’t mean our interactions become any less significant. As a CIO, I’m thinking more about my ‘leadership shadow’, because I have come to learn that your ability to influence and have impact as a leader is dependent on the relationships you have built with the people you work alongside. In the current remote working environment, this has meant trying to be even more aware of my mood, how I come across in virtual meetings, and the tone of my emails.”

In this increasingly digital environment, it has become even more important to not “hide behind a screen” when dealing with the transactional elements of the CIO role, added Aston: “The CIO must take time to digitally interact with genuine and authentic interest in people. By recognising this and encouraging my team to do the same, it has enabled me to successfully maintain positive working relationships, regardless of whether I’m in the office or not,” he said.

In June 2021, technology research firm Omdia issued a report, ‘How COVID-19 and Digital Transformation Drive New Technology Choices and Job Opportunities Outside of IT’, which offers some predictions on where CIOs, and businesses overall, are headed post-pandemic. As a result of coronavirus, the report notes, organisations are now reimagining what the physical office should look like, and how it should function for a company going forward. Naturally, CIOs are at the vanguard of devising how digital or virtual offices will be incorporated into this new concept of working, and what the associated logistical requirements and equipment costs are.

Either way, the pandemic is further proof that impactful macro-economic events can generate far-reaching and deep shifts in the business landscape – all the way down to how IT departments operate, and the role CIOs play within them.

The ambition

Looking beyond the pandemic, to the ‘next-normal’, and the future of work, the prospects for the CIO role seem promising. According to a Forbes report, ‘The Ascent of the CIO’, 70% of postholders believe current technology trends are increasing the chances of the CIO becoming the CEO.

Evaluating Paysafe’s place in this ever-shifting landscape, Aston said: “We have an exciting roadmap for future product innovation in place. I am looking forward to leading the team through the expansion of our current product set, and the development of our iGaming solutions. There is so much more for us to do.”

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