The CIO and CTO post-pandemic perspective
Since the start of 2020, the role of the Chief Technology Officer (CTO) and Chief Information Officer (CIO) has become higher profile than ever before, especially within the financial services industry. Barriers came down, allowing digitalisation to be accelerated overnight so tech teams could quickly implement essential new tech and systems.
Today, as life settles back into something close to what it used to be, organisations are looking at how to use the lessons learnt and strides taken to benefit the business long-term. CIOs and CTOSs need to find the right path to move forward positively, profitably and with a clear focus on the customer experience.
As they embark on this journey, Banking Circle investigated the challenges these experts are facing. We talked to CTOs and CIOs at Banks, FinTechs and PSPs across the UK, DACH and Benelux. The results have been published in an industry white paper: Futureproofing payments tech: The challenges facing CIOs and CTOs
Confidence in the face of the unknown
It was encouraging to see that more respondents are confident than not, in all areas of responsibility. But extreme confidence is lacking. Just a third (33.7%) of the Payments and Banking sector CIOs surveyed feel ‘very confident’ that their organisations are fit for purpose for the future in terms of investigation and procurement of new systems. Extreme confidence was lower still across other areas of responsibility, including Artificial Intelligence (AI) and Machine Learning (ML), data security, new systems migration and training.
Overall, confidence was somewhat higher for CIOs of PSPs and FinTechs than for those working for Banks; perhaps reflecting the innovative foundations of PSPs and FinTechs, compared to legacy tech often encountered by those working in Banks. This was underlined by the fact that just a quarter of Banks said they are ‘very confident’ about existing systems maintenance, compared to 37% of FinTechs.
Figure 1: Source: Banking Circle white paper: Futureproofing payments tech: The challenges facing CIOs And CTOs
The ‘buying’ vs ‘building’ debate
To meet their new objectives and futureproof their businesses, respondents plan to spread their budgets across several payment technology solutions, utilising a mixture of ‘buying’ and ‘building’ to suit their specific requirements. Two- thirds are planning to ‘build’ payments tech in-house; the same number plan to ‘buy’ off the shelf. A similar number (65%) intend to outsource or utilise partnerships.
Perhaps unsurprisingly, given the delays legacy infrastructure can cause, Banks are most likely to buy off-the-shelf (71%). PSPs and FinTechs are most likely to build solutions in- house (70%). FinTechs are also slightly more likely than banks to work with external partners (66%, compared to 64%).
The payments tech skills gaps
Another factor that could well be influencing the decision by many CIOs and CTOs to work with external partners is the issue of recruitment. Skills gaps are being highlighted around the world across virtually every business sector, and payments is no exception.
The area in which the fewest CIO and CTO respondents were ‘very confident’ about their organisation’s readiness for the future was recruitment. This lack of confidence is a concern because 60% hope to increase the size of their payments IT team in the coming year.
The most common gap was in cloud skills, where 60% of FinTechs and PSPs lack experienced team members. Artificial intelligence (AI) and machine learning (ML) was close behind at 53%. Interestingly, though, when asked which were the most crucial skills for their teams in the next year, just 39% of PSPs and FinTechs included cloud skills in their top three; the same percentage cited AI/ML.
Figure 2: Source: Banking Circle white paper: Futureproofing payments tech: The challenges facing CIOs And CTOs
Whilst the new prominence and accountability of the CIO and CTO role weighs heavily on their shoulders, the burden of responsibility doesn’t need to fall entirely on the in-house team. Working in partnership with external providers can ease the burden by spreading the load. A payments bank or financial utility partner can take on a lot of the heavy lifting and reduce stress on any one individual or team.
To discover more of the survey findings, download the white paper here: Futureproofing payments tech: The challenges facing CIOs And CTOs
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