The future role of the CIO

Generative artificial intelligence (AI), cloud-based systems and data analytics have captured the attention of financial organizations for their ability to generate better processes and business value. Financial organizations are under pressure to accelerate digital transformation to compete against fintechs. Leadership must reframe and integrate tech within their organizations for efficiency, long-term value and customer loyalty.  

Now more than ever, chief information officers (CIOs) are at the forefront of these discussions and will be pivotal in integrating this technology into the enterprise, despite growing concerns and risks. 

As the role of the CIO evolves within financial services to increase these technologies’ value, there are key strategic aspects of this role and areas of focus that are front of mind, organized around these four key drivers: security, value-focused technology, stability and innovation. 

Security 

Financial institutions are facing risks from many new and fast-moving technologies like generative AI and the cloud, but also from competition, requiring organizations to innovate faster. At the same time, regulatory pressures, as well as clients’ demands for trust and safety, have only increased the complexity and cost of technology. There’s a fine line CIOs must balance between innovating and ensuring security every step of the way. 

CIOs need to bake security into each design decision, just like cost and user functionality. Especially with new technologies like public large language models (LLMs) and consolidating data into data platforms, CIOs are moving to providing a full stack, white-glove platform of services that includes built-in security, privacy and compliance controls. This allows businesses and product leaders to consume these services and platforms and focus on the business problem they are trying to solve, versus spending time on getting the architecture selected and approved. 

Value-focused technology 

CIOs look to restructure their organizations into value-stream-aligned or product-focused systems, and away from “death by projects.” Any functions or services (hosting, API gateway, onboarding or credit checks) become horizontal platform services (all-in, people, process and technology) and then allow business lines and applications to become self-sustaining teams that own their backlogs, tech debt, success and value to clients. This minimizes handoffs between product owners, the business, data, engineers, testing, risk, etc. 

Stability  

Many CIOs have traditionally separated “change the bank” from “run the bank” in financial services. However, there is a shift change, driven by DevOps concepts but more so by CIOs who are underwater on legacy technology and the need to modernize. This modernization must include stability, but also scalability and availability, which firms are finding further constrain legacy technology. 

Therefore, there’s a shift from legacy technology to merging into single-platform product teams. This allows a single group of technologists (engineers, product managers and architects) to own both the maintenance of the end-of-life (EOL) architecture and the modernization journey.  

Another trend is simplifying the estate and maximizing reuse (and the ecosystem of software-as-service vendors), which is helping with stability with a less complex environment. Investments in next-gen enterprise architecture and new tools are getting traction to give CIOs a real-time understanding of the technology estate (apps, assets, services) linked to capabilities and transformation items. Investing in and having a visual and managed view of the technology estate are key aspects of any CIO’s strategy.  

Innovation 

Most CIOs face an uphill battle with increased digital adoption, new technologies and cyber threats. The key is building a resilient technology organization that can support growth.  

For many financial institutions, the biggest challenge to innovation is the friction that exists for employees when trying new ideas and technologies. As a highly regulated industry, that is understandable, but some CIOs are investing more into making technology, or the organization’s platform, more accessible to users. They are doing it without minimizing security or compliance.  

This happens through investing in simplification (reducing technology services and patterns that do the same thing); adding product managers or putting customer success in front of technology to provide that level of support to users (instead of sending users into some deep, unsearchable sites); creating user communities with engineers (making big investments in developer relationship organizations of ex-engineers who don’t have any build expectations and are only there to create a community and for learning); and even business and citizen developer access to environments and technology to try new things.  

Innovation today, especially generative AI, requires a more modern data ecosystem to test new ideas. Data traditionally sits in many different systems with complex access rights. However, many financial institution CIOs are investing heavily in building “data platforms” that allow a single ingestion pattern, consumption pattern, governance tool or framework that can make the most of the latest cloud-based technologies and cloud-native platform-as-a-service offerings. They still meet all of the security and regulatory requirements that weigh down financial institutions, but allow easier data consumption for future use, including for generative AI and monetizing data. 

As technology in the financial services industry continues to evolve, successful transformation starts with the transformation of the CIO. Effective technology leadership that works in lockstep with business goals and growth strategies will ultimately set up financial institutions for a strong future.  

Fredric Cibelli is a Principal in the EY Financial Services Consulting practice. He currently leads their Cloud practice and is focused on the non-traditional Financial Services market (e.g., inbound banks, industry utilities, crypto native clients, payment companies, and regional banks). 

The views reflected in this article are the views of the author and do not necessarily reflect the views of Ernst & Young LLP or other members of the global EY organization.