How leading FS firms are reimagining their corporate IT function
- Posted on January 19, 2020
- Estimated reading time 3 minutes
Financial services (FS) corporate IT has a reputation problem. One that’s not (entirely) of its own making.
A sustained lack of investment has caused stagnation in many IT teams. And that’s led to the systems they maintain being perceived as slow and inflexible.
Corporate IT is now under pressure to reduce costs while continuing to deliver new and innovate capabilities – before it gets left behind or deemed surplus to requirements.
The end of FS corporate IT as we know it?
New dynamic technologies are emerging today – which threaten the existence of traditional corporate IT teams. Disruptive platforms are democratising IT and enabling businesses to modernise at speed.
Some can deliver modernisation largely by themselves – with little (if any) corporate IT input. AI, machine learning and cognitive services platforms are available to anyone with a browser and a credit card. And that means corporate IT can easily be circumvented (and marginalised).
So, are we reaching the end of the road for the financial services corporate IT function?
In short – no.
Corporate IT remains hugely relevant. It simply has too much invaluable experience to offer. While the new trendy tech and purportedly powerful platforms might offer all the functionality and agility a bank needs, they don’t have the enterprise best practice nous.
Just look at the recent failures of core systems – and the horror story headlines that engulfed the likes of TSB and RBS – for evidence of how treacherous it is to introduce new services without assessing and managing the impact of change. The Treasury Select Committee has now demanded action by the Government and City watchdogs, to ensure banks have suitably robust online systems in place – guarding against similar meltdowns.
What we will see is the role of corporate IT adapt and evolve as the speed of tech disruption gathers pace.
The role of gatekeeper
Corporate IT can create the standards, operating models and governance to ensure technology is introduced and used appropriately. With the skills and experience to know how to define the required standards, corporate IT is in the unique position to oversee the marriage of new technology with an FS organisation’s tech heritage.
Without corporate IT’s knowledge and experience, organisations risk creating a new legacy with shadow IT and the accompanying technical debt.
The problem is, there are rigid constraints placed on corporate IT right now – preventing them from delivering on this promise. Teams often find themselves stuck in a costly cycle of managing legacy applications and infrastructure, leaving them little time to keep pace with emerging technology.
Without extra bandwidth or funding, the danger is that corporate IT becomes an obstacle to change, rather than an enabler.
Four steps to fortify corporate IT’s footing
To address this challenge, I can see four key focus areas for corporate IT teams, which can help them to develop a deeper and more fruitful relationship with their business:
- Exploit the value of the cloud to drive innovation, new services and consolidation of costly legacy architectures. At Avanade, we’re increasingly seeing cloud adoption by FS firms to not only reduce costs, but to improve security and solve regulatory challenges too.
- Deliver at speed, by adopting modern engineering disciplines and exploiting DevOps and agile practices for faster time to value.
- Manage change in partnership with the business, engaging with them in the journey and working collaboratively to ensure adoption is value-driven.
- Work with expert partners, both internal and external. Corporate IT needs to engage specialists who can bridge any skills gaps. Supporting the change and delivering the knowledge to support transformation.
How your peers are conquering the conundrum
That’s precisely what Towergate, a UK-based insurance broker, did. It had huge technical debt following a series of acquisitions, and needed to create headroom for growth, invest in new services and reduce costs. To embrace a cloud-first strategy and enable a more reliable IT platform, it partnered with us here at Accenture and Avanade to provide support across cloud hosting, communications infrastructure and workplace platforms.
That partnership has delivered a 30% annual run-rate cost reduction, translating into £4 million (approximately USD $5 million) savings. And it freed up valuable resources to focus on implementing new, innovative services for customers and employees.
We’ve also worked with a leading German bank to help it deliver a mobile capability which supports a new customer segment. Using cloud and modern software engineering best practices, we helped the bank to minimise its spend while adopting agile and DevOps frameworks, and also achieve a rapid application development.
Finally, we supported Raiffeisen Bank International (RBI) by helping it to migrate employees to Microsoft Office 365 – part of the ‘A New World of Work’ program. By collaborating closely with RBI’s HR and communications teams, the migration was successful – supported throughout by strong advocates on the board who worked side by side with IT.
Partnership – the key to unlocking change
Corporate IT must evolve to support future growth. This means delivering more than just IT services – it demands value creation and legacy protection. And it’s tricky to do that without help.
With the assistance of an experienced partner, you can insulate your legacy while introducing future-ready capabilities. And we’ve worked with corporate IT teams in banks to do precisely that, for many years.
So, whether you’re battling to build a business case, struggling to shape the services that’ll manage your legacy tech, or becoming tangled in training and change management programs, we have the capabilities to support you.