As key digital transformation trends take hold and accelerate, Canadian banks’ chief information officers are becoming even more critical players in shaping their organizations’ futures. And with regulatory changes like the introduction of open banking bringing yet more change to the financial services landscape, the time is now for CIOs to further embrace their role in driving innovation, enhancing competitive advantage and helping Canadian banks grow.
In this Transformation Talks video, PwC Canada’s Anuj Dhall and Jonathan Riva talk about how CIOs can enhance their leadership role within the bank and turn the latest wave of change into new opportunities to thrive. They also discuss how CIOs can make the most of new ways of working, such as agile operating models, as they look to help Canadian banks accelerate their digital transformation strategy.
Jonathan: Welcome to Transformation Talks, a PwC series on the future of Canadian banks. Joining me is Anuj Dhall. Anuj, thanks for joining us today.
Anuj: It's great to be with you, Jonathan.
Jonathan: We've been hearing about the modernization of banks for some time now. As digital transformation evolves into a large enterprise transformation, how do you see this affecting the role of the CIO?
Anuj: I think what we're finding today is the CIO is becoming the epicenter of transformation. So if we take a nod from FAANG; Facebook, Apple, etc., what you saw over the last decade or two is that leaders of businesses are increasingly becoming technology leaders. Whether it's Jeff Bezos at Amazon or Zuckerberg at Facebook, there's so many examples in industry where technology leaders are becoming the face of the company and taking leadership of not just technology concerns, but business concerns. What we're seeing for CIOs at banks is it's very much the same trend. CIOs now have to become advocates for the business outcome, not just the technology outcome and as a part of that, actually take a leadership role in transformation, not just become a passenger on the ship.
Jonathan: With the CIOs taking on a more prominent role in the leadership of the bank from a transformation perspective, how do you view that impacting the customer experience?
Anuj: The impact is not just customer experience, it's also employee experience, which is often the forgotten channel, but clearly when you're helping with the transformation, it starts with digital. And the last decade's been filled with all sorts of transformed digital experiences, journeys, agile as an operating model comes to the fore. What's been missed in my view is the assisted channel, the legacy branches and call centers at the banks that are living with legacy assets. Digital has been sexy and it's been right for the banks to focus there, but the next place to focus has to be the assisted channels and the CIOs that understand this are already starting to mobilize.
Jonathan: What it sounds like you're telling me is there's a lot of legacy technology in those assisted channels. How does that affect the CIO agenda?
Anuj: What it does is fit into a modernization program that the CIOs have to drive and they're doing it. But if you think about branches, the legacy employee experience is actually driven by linkages to old mainframe core banking systems that have green screens. So what the CIOs now are grappling with is how do I modernize those core banking platforms? And it's not just core banking, it's the call center technologies like IVR, it's even the integrations with third party customers that now they're being mandated to open up through open banking. So modernization's a huge theme that CIOs have to not just once again follow, but take a leadership role in driving. And frankly if they do that, they're going to be in the best position to inform the investments that need to be made to address all of these experience issues.
Jonathan: From what you said there's an imperative to modernize technology in the bank but don't they also have to modernize the way they work?
Anuj: One can't happen without the other if you want to be successful. So actually what we've seen in banking is a first generation of agile. Agile’s come as a new model of working, came out of the battles of technology some 20 years ago and they've tried to retrofit it for the enterprise. And what I tell you from our experiences, that many of the banks have not succeeded in achieving the outcomes they wanted. Really the reason for that is putting agile in enterprise, in an enterprise at enterprise scale is a very different challenge than it is in a small shop like a Spotify. And so what we're helping clients with is advising them on how to adjust agile for scale, how to avoid building fragile as I call it and actually getting value and return out of those investments.
Jonathan: There are a host of factors forcing banking modernization. For example, earlier you mentioned open banking, a regulatory mandate. How can CIOs turn this into an opportunity?
Anuj: The first phase is to get over the fear that the mandate imposes and say, what's the upside of this? And the upside is when you think about legacy services, infrastructures and architectures, their ability now with the investment they're going to get to support this mandate allows them to build out things like API economies that build true abstraction layers of the backend legacy. Open banking now requires them to engineer these services so that they, once again, abstract away a lot of complexity and that should give them pace. So really if they can embrace this as an opportunity to invest in something they probably wanted to do for a long time, it all of a sudden becomes an opportunity.
Jonathan: Hearing you speak today there's obviously a lot of things for CIOs to consider. As someone who's been living this for the last 30 years what simple advice would you have?
Anuj: First is they have to move from followers at the table with the CEO to leaders. They have to establish themselves, earn a seat at the table and start leading dialogue.
Second is own experience outcomes. So we know they focused a lot on digital build ups, that's great. I think CIOs have to become leaders of experience, learn human-centered design, put those practices in place in their own teams.
The next is they've got to lead this, what I call agile 2.0 evolution. I think the opportunity now is to drive to really great outcomes, but technology has to take a leadership role.
And finally I'd say, modernization is an opportunity and CIOs that really excel are going to turn it into competitive advantage.
Jonathan: This has been a great discussion on the CIO agenda, Anuj. Thank you very much for sharing your insights with us.
Anuj: Thank you, Jonathan. I really enjoyed it.
Jonathan: And to all our viewers, thank you for joining us.
“CIOs now have to become advocates for the business outcome, not just the technology outcome, and as a part of that, actually take a leadership role in transformation.”
Anuj Dhall is a Partner and Financial Services Technology Leader at PwC Canada. He brings more than 30 years of experience in technology, investment banking and consulting and has led and advised many organizations across North America and Europe through complex digital transformations.
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