IT Best Practices

Rebooting IT: Why Financial Institutions Need a New Technology Model

As the demand for mobile and online technology increases, financial executives see a prime opportunity to capitalize on banking functions that are executed through mobile app technology. Yet as Brian Brief writes for Bain & Company Insights, these expectations must be tempered with a hint of realism, since many IT outfits are being stretched to the limit. Expensive or aging technologies, stagnant budgets, and complex business environments put IT units at a disadvantage when it comes to meeting these ever growing demands.

High Stakes

Brief believes the true solution lies primarily with the business end, though we often hear the opposite advice being offered to CIOs. In reality, daily tech functionality was not the original goal of banking, which prided itself on risk mitigation and efficiency, among other things. For these institutions, the stakes are high, since the need for drastic changes in technology infrastructure could redefine the way they operate on a fundamental level.

Fast Money

Brief says that when businesses do address these challenges by collaborating more with IT, an interesting change occurs – they start to behave more like technology companies:

The new operating model places a premium on speed, agility and the ability to develop new products and services quickly and efficiently. The trend is toward nimble delivery models that largely move from traditional waterfall approaches to Agile wherever possible and iterative for most other development. Many companies struggle with this transition because their governance and audit processes are tuned to executing large programs.

Best Practices

Over the next ten years, most financial institutions will have to change their technology practices at least to some degree. They can achieve this transformation successfully by taking some basic practices into consideration, such as “pace-layering” their approach by building a scalable and flexible middle tier architecture that brings the customer under one view, by restructuring or retiring legacy systems where possible, or by moving workloads that are not mainframe-dependent to the cloud.

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