How IT can lead the financial services industry

LAS VEGAS – There isn’t a single financial services company in the world that isn’t more dependent on technology today than they were a year ago, according to former JP Morgan Chase & Co. CIO Austin Adams. He advised IT leaders to take advantage of today’s economic climate and use technology to bring business units together.

“There has never been a better time for CIOs and other technology leaders to show that technology can add business value,” Adams said. “Executive managers are much more willing to listen to IT folks nowadays. The question is are we going to do anything to add value or just focus cutting costs?”

Adams joined industry experts from IDC Corp., PricewaterhouseCoopers LLC, and CA Inc., for a panel discussion at CAWorld 2008 to share IT management best practices for banks and other financial service companies during the global recession. Nearly every panelist agreed that implementing measures that allow for better collaboration between IT and other business units will be important throughout the crisis.

“Sometimes we forget that we’re the only ones that understand our technology,” Tom Vicknair. chairman of the Financial Services Technology Consortium (FSTC) at JP Morgan Chase, said. “We have to learn to help the business unit.”

“We have to come up with a model where both business and IT really work together on things and how to better leverage technology during these times.”

Joseph Nocera, a principal at PricewaterhouseCoopers, said that IT needs to focus on getting better information and data for its business executives. Developing a more efficient help desk or cutting out unnecessary back-up procedures, he said, can allow IT to spend their money wiser.

“Do we really need to back up all our data every 12 hours,” Nocera asked. IT organizations, he said, save significant dollars by simply pushing that back to a 72 hour window and use the cost savings for other investments.

To get all the business units working together, Adams said that the CIO needs to have a strong voice and a visible seat at the business table. He said that IT leaders need to put themselves in the business executives’ shoes and provide them with the data they need.

“In the financial services sector, the business people have never wanted as much help as they do today,” he said. “Where’s the information and the understanding about today’s world? It’s in the technology and we need to use it to answer business problems.”

Mark Bubar, vice-president of financial services at CA, offered up some of his company’s best practices for surviving the credit crisis. He said the topic of IT governance is paramount, because technology executives need to have a mechanism that shows the c-level executives how IT is mitigating risk, maximizing investments and aligning with business goals.

“Control frameworks will be necessary,” Bubar added. “You have to explain to management the purpose of these investments in security and compliance and what they do in relation to regulations like Sarbanes-Oxley.”

Building your IT architecture to be ready for potential litigation and e-discovery is also a wise move he said. “Being able to find the truth quickly is important for IT in any scenario,”

Lastly, Bubar said that one out of every five bank transactions do not get completed without manual intervention. Better transaction efficiency can only come with better IT automation, he added.

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Jim Love, Chief Content Officer, IT World Canada

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