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10 min read

The Horizontal, Embedded 2023 Technology Plan

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“It’s supposed to be automatic, but you have to push a button.” —John Brunner


Back in the day, when I was the CIO of a bank, we had a Technology Plan. It was a single document that had every aspect of the bank’s technology goals for the year – hardware, software, vendors, projects (all led by information technology, or IT, by the way) – the entire bank IT budget. It was designed as a “vertical” document that discussed and incorporated line of business needs and goals and discussed them in chapters. This was because technology planning was considered a “vertical” effort, and the CIO was a bit of a Czar who had very strong budget authority.

That was then, and I won’t say how long ago that was – too depressing, although it was fun being a Czar for a while. This is now, and one of the most fundamental changes to technology planning we have seen is that it is now a “horizontal” (or “latticed”) effort and outcome. Investments in core systems and infrastructure have declined as a percentage of total spending. Investments in delivery, payments, and information systems increased significantly and buying decisions and accountability for them moved to the lines of business. The result? Rather than lines of business being chapters in a technology plan, technology is a piece of the strategic plan that can encompass multiple business groups. Consider:

  • Digital banking/channel migration plan – The institution’s digital banking plan involves every line of business that touches customers. Technology is at the center of it, and the IT group is a major enabler and player. But the business goals and the measurements of success lie with the retail banking, business banking, and lending groups.
  • Payments plan  Payments is, in fact, a line of business that has a huge technology component, but it must also address innovation, adoption, usage, profitability, and customer experience. The CIO is in the middle of these plans, but very likely is not leading them.
  • Risk plan – Operational risk management is a company-wide discipline that has become the focus of regulators, boards, and the “C” level. In our 2022 What’s Going On In Banking study, cybersecurity was the #2 concern of CEOs. That topic is one on which the CIO will lead the planning, but virtually every back-office team – operations, fraud, risk, HR, and marketing – has pieces of the overall risk plan.
  • Vendor management plan  CIOs will probably not have the primary relationship responsibility with many of the institution’s major software vendors anymore, because they aren’t the authorities on how well the vendor and systems are performing (e.g., digital banking). They will have some piece of it, though, such as reviewing outsourced disaster recovery and information security plans.
  • Information/business intelligence plan – Business intelligence plans have several components. Some, like creating/maintaining data repositories and data integration, still generally fall on IT shoulders. However, more often than not, reporting and analytics are now done in almost every line of business, and this is where the payoff from the entire plan/investment occurs.
  • Infrastructure plan – This probably remains in the purview of the CIO, although a great deal of interaction is still needed with LOBs to manage it.

These are just some examples. There is a consistent theme in all these areas. Key strategic initiatives involve multiple business groups, and each one has technology as a component. In effect, much of a bank’s technology plan is embedded in its other strategic plan and initiatives. As a result, a single, stand-alone technology plan or document may be a thing of the past.

So what? Here are five things we see that can make this world of technology planning more successful:

1. CIO and IT teams have an early and visible presence in all strategic initiatives.

This may sound obvious, but it is surprising how many times we see IT brought into these conversations very late in the game.

2. The CIO and IT still have the authority to enforce standards – infrastructure, operating systems, data, and key standards relating to software and vendors.

As technology planning decentralizes, standards are crucial. Nobody but the CIO knows what non-negotiable standards need to be set.

3. IT still controls application programming interfaces and system integration.

This is a standard, but it needs to be called out because one of the most important and frustrating issues in bank technology today is bad clumsy system interfaces/integration. This is a top focus for any CIO.

4. IT and the CIO lead the repository and integration components of any information/business intelligence plan.

There are hundreds of data sources and destinations in any financial institution, and no end to the opportunities to have redundant or inconsistent data. The alternative to having the CIO manage this is to set up weekly meetings in the hallway where people can discuss why numbers on reports are different.

5. CIOs still track and report all IT spending and set an overall IT budget, even if they don’t have the final say on how it is all spent.

Cornerstone numbers show that technology still represents 10% to 15% of all non-interest expenses, third only to people and facilities (at some point in the not-too-distant future, it will be second only to people). Management needs a very clear picture of total technology spend and payoff, and the CIO is best positioned to do this.

In other words, give the CIO and IT key responsibility and authority in vital components of every horizontal strategic initiative.

When done well, we have seen that horizontal (or latticed) technology plans are powerful and can move the bank forward quickly. When done poorly, they are expensive, frustrating, and can slow strategic progress. We’ll opt for the former.

“Technology is a useful servant but a dangerous master.” –Christian Lange

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