Banking and investment services
CIOs are increasingly convinced that their old business models and
existing value propositions will not be sustainable in the future, according to
a survey from Gartner, Inc. Gartner’s 2018 CIO Agenda Survey gathered data from
3,160 CIO respondents in 98 countries and across major industries, including
354 banking and investment services CIOs.
"Digital transformation and its related
technologies such as APIs are more important for banking than for other
industries,” said Pete Redshaw, managing vice president at
Gartner. “Banks and other banking and investment services organizations clearly
recognize that the status quo is not sustainable, and they must disrupt
themselves before it is done to them."
Top Business Objectives
When it comes to strategic business
priorities, the survey found that digital business/digital transformation is
more important for banking (first priority for 26 percent of respondents) than
for all industries (17 percent). Just behind digitalization on 25 percent,
growth/ market share is a further key priority, followed by complementary focus
areas of profit improvement and customer focus (12 and 11 percent
respectively).
Banking and investment services CIOs also
place a relatively high priority on the globalization of their businesses
(seven percent), a priority which does not make the top 10 at all for the all-industries
average. Geographic expansion is clearly important for a business that is (1)
easier to scale over physical distances using electronic movements of money,
and (2) seeking higher growth in emerging markets.
Top Tech to Win
In response to the question ‘Which technology
areas do you think are most important to helping your organization
differentiate and win (achieve your mission)?’ BI/analytics topped the list with banking
sector CIOs at 26 percent followed by digitalization/digital marketing at 21
percent.
In terms of differentiating technologies, four
categories stand out when compared to other industries
- Artificial intelligence (AI) is
seen as more differentiating (eight percent) for banking than the
all-industries average (five percent).
- The
combination of application programming interfaces (APIs)
at four percent and omnichannel/multichannel at
three percent are not especially high, but they are not present at all in the
all-industries top 10.
- Legacy
modernization is a top 10 item for the banking industry, but not present in the
all-industries list.
- The Internet of Things (IoT)
is a top-10 item for all industries (six percent), but is not present for
banking and investment services.
"These priorities point to a continuing
tension between two opposing forces," said Redshaw. "On the one
hand, there is a need to rapidly transform the business, while, on the other
hand, there is the innate inertia that arises from a huge IT estate that
supports a heavily regulated industry."
Note that blockchain does not feature (it ranked
twentieth for banking and investment services). Despite the attention and
visibility, it is not yet seen as a differentiating technology for banks. That
may change in the near future.
Figure 1. Top Tech to Win
|
Rank
|
Banking/Investment
Priorities
|
%
Respondents
|
|
1
|
BI/analytics
|
26%
|
|
2
|
Digitalization/digital
marketing
|
21%
|
|
3
|
Mobility/mobile
applications
|
11%
|
|
4
|
Artificial
intelligence
|
8%
|
|
5
|
Cloud
services/solutions
|
8%
|
|
6
|
Legacy
modernization
|
4%
|
|
7
|
Application
programming interface
|
4%
|
|
8
|
Customer
relationship management
|
4%
|
|
9
|
Automation
|
3%
|
|
10
|
Omnichannel/multichannel
|
3%
|
Source: Gartner (October 2017)
Top New Tech Spending
Planned additional spend on digitalization/digital
marketing is also much more prominent in the banking and investment services
sector (22 percent) than the all-industries average (12 percent).
"This is an industry that recognizes that
a firm must become truly digital - in culture, value and technology - if it is
to stand a chance of surviving and thriving," Redshaw said.
Cloud is ranked lower in the banking
sector (fourth versus second for all industries) but has the same percentage
assigned to it (13 percent). Banks would like to make more use of public cloud, but are held back by their
risk-averse culture and their regulators.
For AI, there is only a small difference in
absolute terms between banking and all industries, but it is a large one in
relative terms (7 versus 4 percent — nearly double). Being able to turn raw
data into actionable information by spotting unexpected patterns or developing
superior algorithms will strongly differentiate banks that do this well from
their more mediocre rivals.
Figure 2. Top New Tech Spending
|
Rank
|
Banking/Investment Priorities
|
% Respondents
|
|
1
|
Digitalization/digital marketing
|
22%
|
|
2
|
BI/analytics
|
18%
|
|
3
|
Cyber/information security
|
13%
|
|
4
|
Cloud services/solution
|
13%
|
|
5
|
Data management
|
10%
|
|
6
|
Mobility/mobile applications
|
9%
|
|
7
|
Networking, voice/data communications
|
7%
|
|
8
|
Infrastructure/data center
|
7%
|
|
9
|
Artificial intelligence/machine learning
|
7%
|
|
10
|
System/process information
|
7%
|
Source: Gartner (October 2017)
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