Published by Gbaf News
Posted on May 3, 2014
5 min readLast updated: January 22, 2026
Dirk Anderson, Head of Professional Services at RedPixie
The banking and finance sector has created an IT “crutch” over the last few years. It is now limping behind more agile competitors from a technology standpoint. There has been a huge investment in research and development and engineering initiatives in many of the banks but some of these initiatives have failed or are doomed to failure because the people leading them are trying to deliver against a challenging backdrop of bloated legacy process, bureaucratic cultures, organisational inefficiency, compliance and security fears. The result is that many initiatives are crippled from the start.
Initiatives will simply stall and end up in the “too hard” bucket. This is not because it’s too difficult technically, but more so because of the banks organisational make-up. The IT challenge facing the sector is the fear that exists in making any important changes. Significant IT change that might represent a risk to IT operational stability is scrutinised heavily and even changes that represent small risks with limited impact are revoked, delayed or become difficult to pass through the red tape. This often leads to IT teams taking the path of least resistance.
For example, many banks are wisely investing heavily in cloud technologies. But the fear created by the compliance and security teams is the biggest single roadblock. Questions such as:
The reality is this:
Dirk Anderson
In short, the data residing in a major cloud provider’s data centre can be made as secure and in many cases more secure than the data centre facilities provided by the banks themselves. While the banks are stalling on the “is this secure” and “how do I keep control” question, more nimble organisations are rapidly consuming ready-made services from the Cloud and using smart measures to ensure that they protect their own data as well as their customers’ data.
The banks need to review their IT strategies for the long term to ensure that strategies are clearly aligned to the banks business strategies. Some IT departments within banks have become so large and dispersed that that the IT teams appear to have forgotten that they work in a banking business and not an IT business. A bank exists to look after its customer’s money and to invest that money wisely and safely. The recent banking crisis has resulted in a level of scrutiny that the banks are not accustomed to. IT exists to support the banks strategy and to run its processes. That’s it.
The key thought process of any banking CIO today must be “how do I build a strategy that supports the bank’s business strategy”. First and foremost it is about providing service. Secondly it’s about partnering with the business in a way that technology innovation supports the broader strategy. Key considerations for banking CTOs or CIOs include:
We have seen many real life examples of issues in IT operations teams in the financial industry such as:
These are only examples, and not every bank has such inefficiencies, however in large organisations, there are issues to address. If you were to count the real cost of having thousands of staff each waiting two weeks to start working in a large global bank, the costs are eye-watering. IT departments in the financial industry have to take action – and either consume more ready-made IT services such as cloud services, or start operating like cloud providers.
In this day and age, the provision of commodity services should happen at the push of a button and the button should be pressed by the business person, not an IT person. Process and culture need to be changed so that the banking and finance sector can regain their competitive advantage from the likes of digital and retail companies. By seizing this opportunity, we will be able to become more agile, competitive and maintain our prestigious financial heritage.
Explore more articles in the Technology category
