IT Transformation in Financial Services: Recognising an On-Demand Future

A Blueprint for Real Change: Intersecting Business Culture with IT Transformation

The financial services industry in Australia and abroad is undergoing a major transition. Technology has levelled the playing field, and for incumbent financial services institutions, recreating your brand as a digital business is paramount to retaining your customer base.

Some of the biggest banks in the world, that often have a legacy of well over 100 years of operations, are being challenged head-on by “neo-banks”, new market entrants whose creation of a digital footprint has been almost seamless. The industry is also experiencing heightened regulatory environments around information management, product development, as well as security and data breach disclosure.

The challenges don’t just sit in operations and competition, the industry is also grappling with an identity crisis from within, can the culture of banking evolve into one which is agile, responsive to its customer’s needs, and digital-first?

This was the backdrop to last month’s executive luncheon entitled “IT Transformation in Financial Services: Recognising an On-Demand Future” which was hosted by Dell EMC in partnership with Innovatus Media.

The luncheon was hosted by Adrian Iannessa, the Consulting Services Leader in Australia for Dell EMC, with a keynote presentation delivered by Dell EMC’s Ted Newman, the Resident Head of Cloud Services at one of the UK’s biggest financial institutions. Ted’s presentation reflected on the transformation journey he is involved in within the bank.

Along with contribution from the group, commentary was also made from Frederic Dussart, the Senior Vice President of Consulting Services at Dell EMC.

A Transformation ‘Mission’

For banks to successfully transform their IT operations, they need to understand what the real mission is for their business, and why they are embarking on a transformation journey.

“It is important to create a ‘blueprint for success’, that aligns purpose, values, and the brand of your organisation to the transformation project itself,” said Ted Newman, a cloud engineering lead from Dell, reflecting on a transformation journey he was involved in for a major European Bank.

Ted and the group explored how important it was for organisations to understand that an IT transformation project is a business project. And for the project to see success, banks needed to align the values of the project with the values of the business.

“Doing this leads to real priorities being addressed and allows you to create long-term targets,” Adrian noted.

Adrian noted that every team at your bank should have a clear understanding as to what their contributions are, and what they are trying to do.

Not only is creating a blueprint for your entire organisation critical, you have to look at the why and promote this.

“I think you need to look at why do we need to transform? Increased regulations, competition, as well as the impact that the Fintech community is having on customer expectations is crucial,” Ted said.

“It is about trying to create a cultural shift, you have to move from a ‘controlling’ approach, to an empowering approach. We need to move from long-term planning to experimentation planning.”

 

CxO Buy-In

Intersecting a business strategy and a technology transformation project is not always fluid. Gaining C-Suite sponsorship on wholesale transformation is critical to the success of the project and an area discussed by the group.

“Ultimately, a modern-day bank should really be considered to be a ‘technology company’ who does banking, if your business doesn’t understand this, challenge them to turn technology “off” for just one day,” Ted commented.

The business needs to understand how important IT functionality is to delivering to its customers. With specific emphasis on IT infrastructure, the group discussed the importance of educating C-Suites on the benefits of new technology adoption.

One delegate also noted that starting small is key, stating that “in our most recent transformation agenda, we did minimally viable products, and we did frequent releases to encourage small successes. If we tried to do big bang type things, there would have been fear of failure from the business.”

It was noted universally that executive sponsorship was crucial. Without gaining buy-in from the top, projects were destined to fail, as change is often a difficult adjustment to make.

 

Making Agile Work

Leaning into the commentary around creating minimal viable products as a starting point to transformation. The group discussed the benefits, as well as the challenges, of implementing agile methodologies alongside transformation projects.

“Introducing agile methodologies is very challenging for large organisations,” one attendee noted.

“When you create teams from different parts of the organisation, there are barriers for them to work with. It is a real problem when approaching agile as it seems like everyone is bought in. However having a team made up of different areas of the business, the challenge of change manifests itself.”

Agile methodologies have been adopted as global best practice as of late due to the relationship that the system has with the human condition. Humans like to work in small teams, and not embark on repetitive processes. However, when organisations are conditioned to work in one way, implementing these ideas can be challenging.

Another delegate shared their experiences by noting that: “We did not start with ‘here is the new agile organisation chart, Ready Go!’ We started with one team and grew from there and experienced an evolution.”

This aligns closely to the “start small” mentality of IT transformation projects. On top of this, it is also critical for teams to ensure they are outcome driven, and not process driven. If banks remain process driven, the bureaucracy of the enterprise will overshadow real customer and business outcomes.

 

Conclusion

Ted Newman concluded that IT and business strategy needed to be seen as the “North Star”:

“Know where you are going, but appreciate that you have to work in different ways to get there.”

This idea brought together all the key themes and discussion points of the luncheon. Transformation agendas, business blueprints, IT projects and rollouts, all need to be serviced by a culture that is adaptable and ready to change.

This change is not linear, it is something that will in itself evolve and cascade through your business.  For the banking industry, these themes are critical, as without this change the pressures of digital disruption are likely to create negative outcomes for organisations who remain stagnant.