Could an outsourced CIO help your financial institution boost growth and manage cybersecurity risks?
- An outsourced CIO can help financial institutions more effectively tackle technology challenges like cybersecurity, risk management, outdated infrastructure and growth.
- An outsourced CIO provides strategic technology leadership focused on giving your institution the tools to meet your long-term growth goals, including integrated systems and improved customer technology experience.
- Crucially, an outsourced CIO is also a people leader who can strengthen your IT team and help your team members operate more effectively.
- To determine whether an outsourced CIO could help your institution, evaluate factors like whether your current technology strategy is delivering ROI or if you see room for improvement.
Every day, financial institutions face cybersecurity risks, outdated platforms that limit growth and other significant technology-related challenges. To gain access to the strategic technology leadership needed to overcome these hurdles, more institutions are moving to hire a CIO.
But is a full-time hire always your best option — or can an outsourced CIO provide an effective (and cost-effective) alternative? Keep reading to learn more about why financial institutions are increasingly exploring outsourced or fractional CIO services as a way to boost both growth and cybersecurity.
What are the top technology challenges that financial institutions must overcome?
Growth-focused leaders at financial institutions must often overcome aging technological infrastructure or an outdated user experience. And all institutions face ongoing challenges around cybersecurity and risk management as leaders seek to protect their customers and meet the requirements of industry regulators.
Key specifics include:
Risk management and cybersecurity
Cybersecurity and risk management are perhaps the biggest technology-related challenges for financial institutions. Institutions face both strict cybersecurity compliance requirements and an active cyberthreat environment that includes a relentless barrage of attempted ransomware attacks.
Worse, the explosive growth of AI technology has only increased the cybersecurity threat level. AI tools have made it easier for would-be hackers to launch cyberattacks, making it possible for individuals without sophisticated coding or IT knowledge to launch phishing scams and other cyberattacks.
Beyond cybersecurity, financial institutions must also navigate other strict regulatory compliance rules and manage liquidity risks, both of which can be made harder by legacy systems.
Aging back-end infrastructure
Aging technology infrastructure makes it harder for financial institutions to grow. National institutions all have integrated, interconnected systems that generate vast pools of customer data, which those institutions can then use to precisely match their marketing and product offerings to individual customer needs. For the many community or mid-sized financial institutions that lack similar capabilities, competing for those customers has gotten harder.
Poor front-end user experience
National financial institutions and fintech companies typically offer a smooth, attractive front-end user experience on their apps and websites. Does yours compete? Often, the answer is no, which can make potential customers less likely to consider you as a banking option.
Limited digital asset capabilities
More financial institutions are considering entering the digital asset space, especially in the wake of the GENIUS Act. But a technology deficit makes it harder to do so, further hindering your appeal to both consumer and commercial customers who may want to invest in cryptocurrencies or use stablecoins as a payment mechanism.
How does CIO outsourcing help your financial institution grow and manage risk?
An outsourced or fractional CIO gives your financial institution strategic technology leadership without needing to invest in a full-time C-suite position. This can provide a cost-effective way to boost growth, streamline your operations and strengthen your cybersecurity defenses. And a CIO is also a people leader who can help your team members work together more effectively.
Look to an outsourced CIO to provide:
- Strategic growth: Your IT team is focused on putting out today’s fires, not thinking strategically about what technology you’ll need to thrive five years from now. By contrast, an outsourced CIO is always looking ahead to give your institution the tech infrastructure you’ll need to deliver on your long-term strategic goals.
- Cybersecurity leadership: Unless your institution is large enough to hire a CISO, your CIO is your strategic leader on cybersecurity. An outsourced CIO will understand the most effective cybersecurity strategies, like defense-in-depth and lead your institution towards implementing a modern, risk-based security posture.
- People leadership: As a C-suite level executive, an outsourced CIO typically understands people as well as tech. This is a critical (if often overlooked) benefit, because your CIO can help you identify not just technology gaps, but also skills issues and personal development roadblocks that could be limiting growth. Look to a CIO to help you build a more effective technology team that’s able to tackle higher-level work.
- Member experience improvements: An outsourced CIO can help you compete for new customers, especially among millennials and Gen Z, by leading efforts to modernize your app and website. These improvements can make you more attractive relative to national institutions or fintech rivals, which typically offer a smooth user experience but may fall short on customer service.
- Better operational infrastructure: It’s tough to grow if you’re running on legacy systems that don’t talk to each other. An outsourced CIO can change that, leading the charge to migrate to modern integrated systems and better integrate AI, delivering the back-end infrastructure to drive growth.
When does it make sense for your financial institution to hire an outsourced CIO?
When does it make sense to hire an outsourced or fractional CIO? Here are key questions to consider:
- Could better leadership deliver more ROI? Think about what you are already investing in areas like cybersecurity, AI and member technology experience. Are you happy with your results — or could additional strategic leadership offer better outcomes?
- Could better front- or back-end tech drive growth? Better tech usually makes growth easier, but should you prioritize back-end infrastructure or front-end member experience? And do you have the capability to improve either without additional help?
- Does your current IT team still meet your needs as-is? Your IT team may have been set up to fit the needs of your organization as it was structured a decade or more ago. Is it still working as it should, or would you benefit from a strategic IT overhaul? Do you need more people leadership?
How Wipfli can help
We advise financial institutions on growth, risk management and cybersecurity, including by providing outsourced CIO services. Let’s talk about your needs and whether solutions like fractional technology leadership would help. Start a conversation.
Let’s make your institution stronger
