CIOs working in retail banking need to have a clear
understanding of their bank’s IT strengths, and invest to retain
and develop any unique competitive advantages for the
future.
To enable this, technology should be viewed by IT chiefs as a
tool to develop specific business-processes, rather than as a
commoditised service that doesn't enable firms to differentiate
themselves from their competitors.
The warning was issued by Professor Andrea Masini of the London
Business School in a keynote address at Gartner’s financial
services conference in London.
Masini said banking CIOs in particular needed to be able to
match their IT investments to their needs, depending on the size of
their organisation and its areas of specialisation.
“One key principle to grasp is not to under-invest if yours is a
complex organisation. Equally, you should not over-invest – or
over-engineer – if yours is a relatively small or simple company,”
said Masini.
“But whatever you do make sure your processes remain unique,
otherwise even poor companies will be able to catch you up buying
the same processes off the shelf.”
Masini said CIOs should remember that IT assets are imitable,
but can be used to develop capabilities that are non-imitable.
“Technology is not a silver bullet. IT needs to be put to use to
develop real business process reform – that is where its true value
resides.”
Are you time-agile or range-agile?
- Masini said banks generally developed business process agility
either to extend their product range or to speed up time-to-market
of products.
- Brokers and investment banks generally concentrate on being
time-agile, while retail banks look to develop
range-agility.