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The delicate balancing act of the CIO/CTO in financial institutions

Jun 22, 2023
By: Andrew Maychruk

Leaders in a highly regulated industry know well the constraints imposed by regulations, but what many may miss are the opportunities they also represent. It’s easy to view regulations as barriers and let them become excuses to avoid change and innovation. Such short-sighted thinking may be limiting your organization.

Even though rules can often be perceived as do's and don'ts, let’s strive to transform the negatives into positives. For instance, can we view regulatory compliance as an opportunity for a value add? Are there opportunities for process improvement?

Sarbanes-Oxley (SOX) Actcontrols and the consolidated audit trail (CAT) should not be about merely documenting and strengthening controls. If a manual process exists, can we automate it and eliminate a particular risk, rather than adding compensating controls? Should you perform user access reviews to address a key control, or can they be used to measure quality control, user experience satisfaction and operational performance?

Chameleon-like adaptability

CIOs and CTOs working in a financial institution need to exhibit chameleon-like adaptability. They must be versatile, owning functional responsibilities and understanding the key concerns of their audience. Adapting to the terms embraced by leadership is essential, even though these traits may not always conform to a structured, regulated environment.

Their job isn’t just about managing servers and software. They need to monitor business trends and assess their future implications on the technology environment. In addition to tracking trends, it's vital to educate business partners about why certain digital transformation topics are relevant, as opposed to those that are merely noise or rebranded existing challenges.

Leaders should approach opportunities, initiatives and inquiries through a multidisciplinary lens, understanding business priorities, key performance indicators and risk factors, and incorporating business terminology into technology discussions.

Broad responsibilities

While they may have intimate knowledge of the technical infrastructure environment and can tell when it's not performing as expected, this should not be their sole focus. They need to assess the qualities and capabilities of partners and suppliers, reassess resource capacity, identify opportunities for staff development and not lose sight of value streams, processes or workflows.

The question is, how can one instill discipline, structure and stability without stifling innovation, creativity and self-discovery?

Retaining and recruiting talent is a challenge, not just for the financial services industry, but for many organizations across numerous industries. In a financial institution, CIOs and CTOs must understand how to motivate and identify opportunities for skill development while educating junior staff on the fundamentals of regulated industry priorities.

Financial institutions are a critical component of the economy’s infrastructure and, at times, their importance can be overshadowed by fast-growth companies in unregulated industries.

The role of a CIO or CTO can be extremely impactful. They can drive the organization forward by translating new product concepts into actionable services and growth opportunities, spurring process improvements and promoting transaction accuracy and cost containment.

All these must be achieved without compromising the organization’s risk appetite thresholds. Furthermore, the CIO works alongside auditors, risk management and regulators to balance and instill a healthy respect for the ever-evolving rules and guidelines while assessing their effective application.

The role, while challenging, involves balancing the company’s competing priorities within a technical environment that supports the success of the entire enterprise. However, those individuals who can recognize this delicate balancing act will never experience a dull career.

How Wipfli can help

We bring informed perspective and decades of industry experience to the table, helping financial institutions identify emerging trends, risks and opportunities, and develop effective strategies to achieve their long-term goals. Our experienced professionals can support your organization in making informed decisions, allocating resources efficiently and standing out from competitors, positioning your organization for long-term success in an evolving industry. Contact us to learn more.

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Author(s)

Andrew Maychruk
Senior Manager
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Bank on Wipfli blog
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