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Digital transformation is the top priority for more than a quarter of CIOs as they realise they must change their business models before new competitors force them to do so.
Financial services firms want to avoid being decimated in the way traditional high-street travel, taxi service and holiday rental companies have been by digital platform-based competitors.
According to a Gartner survey of 354 CIOs in the financial services sector, 26% said becoming a digital business was their top business priority, 25% said growth and increasing market share was their top priority, 12% said improving profit and 11% said customer satisfaction.
This was part of the analyst company’s global survey of more than 3,000 CIOs, which showed that financial services CIOs are particularly focused on introducing digital business models. The survey found that an average of 17% of CIOs across all sectors named digital transformation as their number one priority.
“Digital transformation and its related technologies, such as APIs [application programming interfaces] are more important for banking than for other industries,” said Gartner analyst Pete Redshaw. “Banks and other banking and investment services organisations clearly recognise that the status quo is not sustainable, and they must disrupt themselves before it is done to them.”
Putting digital business models at the top of their priority lists will see CIOs given more budget for the IT that underpins digital business.
The Gartner research found that business intelligence/analytics was the most important technology to help organisations differentiate, with 26% agreeing with this. Digitisation/digital marketing (21%) was seen as next most important. A total of 11% named mobility and mobile applications as the most important differentiator and 8% said it was artificial intelligence.
Read more about digital disruption in business
- Headline figures from KPMG’s Outlook 2017 survey of 1,500 CEOs shows that 40% expect technology innovation to cause major disruption.
- IT cannot remain a reactive cost centre and cheerful help desk, but must become a competitive, cut-throat service provider and powerful champion of emerging disruptive technology.
- UK startups focused on technology for insurance companies saw capital investments double last year.
Meanwhile, 4% of the CIOs put legacy modernisation as their top priority.
“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.”
Perhaps surprisingly given the huge hype, blockchain was seen as the 20th most important differentiator technology, according to the financial services CIOs. Gartner said blockchain is not yet seen as a differentiating technology for banks, but that may change in the near future.