How crisis-proof is your financial organization?

First, the good news. Some 76% of chief information officers at financial institutions say they're prepared to help their firms withstand another major business disruption. This is according to a recent study Genpact conducted with the MIT Sloan CIO Symposium.

Now, the bad news: If these CIOs aren't prudent, their confidence may be misplaced.

Here are four considerations to help you determine how crisis-proof your financial institution really is.

CIOs in the financial industry expect their roles to change in several ways. More than half of those we surveyed believe that, over the next two years, their roles will require greater cross-functional collaboration, involve more responsibility for driving business transformation, and have increased oversight for other technology-related functions.

This begs the question: How will they manage these added responsibilities? To survive future upheavals, they'll need to find a balance between new and traditional duties.

One of the study's major findings is that the role of CIOs is evolving away from keeping the lights on and toward business transformation. And that's a good thing.

But there can be no denying that the digital-first world emerging out of the global pandemic needs a robust infrastructure. Financial institutions rely heavily on online platforms and cloud-based solutions, so they're only as good as their network infrastructure. It must be fast, secure, and reliable.

Just over half of the CIOs surveyed identified “creating revenue through new digital products and services" as a responsibility of their teams, while just under half identified smooth operation of existing information technology infrastructure. Is this the right ratio? If not, customers will increasingly encounter difficulties, such as system downtime and trouble logging on to mobile apps.

By now, many traditional banks have made strategic alliances with fintechs. Today's real challenge comes from “techfins" that use analytics to predict customer needs and provide seamless, hyper-personalized experiences. If fully exploiting analytics provides a competitive edge today, it will also be key to the success of any future disruptions.

Of all the industries we surveyed, the financial industry was the one most likely to strongly agree that their CIO organization is proactively building a company culture of data-driven decision-making. But techfins remain dominant over banks and other financial institutions in this regard.

If data quality is poor or data lakes are inefficient, it's hard to make data-driven decisions that drive business value. Banks hold vast amounts of data about their customers – income, savings balances, investments, spending patterns and more – but they are not making the best use of this data. It's time for CIOs to tap into these treasure troves of data.

Traditional banks are among the few industries that still rely on mainframe computers, but that appears to be changing. CIOs of financial institutions appear bullish on the cloud when it comes to apps. Some 44% of respondents say that, over a 12-month period, they've invested in re-platforming applications to move to the cloud. Just over 40% have put money into cloud migration to help their companies adapt to changing business conditions.

Commercial banking is far behind consumer banking in the migration process. The operating model for commercial banks is about relationship management. But in a distributed work environment, such as the one created by the pandemic, banks won't be able to maintain strong bonds with commercial customers without more cloud-based features, services, and apps.

CIOs in the financial industry should be proud of their accomplishments with respect to pandemic response, but they can't afford to rest on their laurels.

They need to stay focused on keeping their IT infrastructures running smoothly. They must make better use of data and analytics to improve business decision-making. And they must be sure to make the most of the cloud for their institutions. Focusing on these key areas will ensure that financial institutions can weather any storm that is to come.

This article was authored by BK Kalra and first appeared in BAI Banking Strategies.