CIOs in the financial sector are betting on digital transformation

Financial sector CIOs are betting on digital transformation

Main economic objectives

In terms of strategic economic priorities, Gartner’s study shows that digital transformation and the digital economy are more important for financial services (ranked 1st priority for 26% of respondents) than for all industries combined (17%). Closely following digitalization at 25%, growth and market share represent another priority, followed by complementary areas such as improving profitability and customer focus (12% and 11% respectively).

Banking CIOs also assign relatively high priority to the globalization of their activities (7%), a priority not found in the top 10 across all industries on average. It is clear that geographic expansion is an important factor for players who can rely on electronic financial flows to eliminate physical distance and are seeking growth in emerging markets.

Strategic technologies

In response to the question “Which technology areas do you believe are most important in helping your organization differentiate itself and achieve its objectives?”, BI and analytics rank first with 26%, followed by digitalization and digital marketing with 21%.

In terms of differentiating technologies, four categories stand out compared to other industries:

Artificial Intelligence (AI) is considered more differentiating in banking (8%) than in the overall industry average (5%).

APIs (4%) and omnichannel/multichannel approaches (3%) are not particularly high-scoring, but these technologies do not appear at all in the top 10 of other sectors.

Legacy system modernization is one of the top 10 concerns in the banking industry, but does not appear in the list for other sectors.

The Internet of Things (IoT) is among the top 10 technologies across all industries (6%), but is not present in the banking and financial sector list.

For Pete Redshaw, “these priorities indicate an ongoing tension between two opposing forces: on the one hand, the need to transform the business rapidly, and on the other, the inherent inertia resulting from a heavy IT machinery serving a highly regulated industry.”

It is worth noting that Blockchain does not appear in the banking industry’s top 10 (it is ranked 20th by CIOs in the sector). Despite the attention and visibility it receives, Blockchain is not yet considered a differentiating technology for banks (although this could change in the near future, according to Pete Redshaw).

New technology investments

Additional planned investments in digitalization and digital marketing are also significantly higher in banking and financial services (22%) than in the overall industry average (12%).

“This is an industry that is aware that a company must become truly digital – in terms of culture, value, and technology – if it wants any chance of surviving and growing,” Pete Redshaw explains.

Cloud is ranked lower by the banking sector (4th versus 2nd for all other industries), but is assigned the same percentage (13%). “Banks would like to make greater use of public cloud, but continue to be held back by cultural risk aversion and regulation,” observes Pete Redshaw.

In terms of Artificial Intelligence, there is only a small absolute difference between banking and other industries, but a significant relative one: 7% versus 4%, almost double. “The ability to transform raw data into actionable insights by discovering new patterns or developing better algorithms should allow banks that embrace this path to strongly differentiate themselves from more cautious competitors,” concludes Pete Redshaw.

[1] The 2018 Gartner CIO Agenda survey is based on data collected from 3,160 CIOs across 98 countries, including 354 CIOs from the banking and financial sector.