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October 30, 2017

Going digital ranks as #1 priority among banking CIOs

AI, APIs and IoT are the technologies expected to be the most differentiating for the banking and investment services.

By Tom Ball

Other industries could learn from Banking and Investment services, with its CIOs outpacing others and found to be forging ahead in pursuit of digitalisation.

According to the Gartner 2018 CIO Agenda Survey, a substantial 26 per cent of respondents believed that digital business and transformation is the first priority for the banking industry, with 17 per cent viewing digitalisation as more important for banking than any other industry.

Pete Redshaw, managing vice president at Gartner, said: “Digital transformation and its related technologies such as APIs are more important for banking than for other industries… Banks and other banking and investment services organisations clearly recognise that the status quo is not sustainable, and they must disrupt themselves before it is done to them.”

The report shows that 22 per cent of respondents rank digitalisation as the number one priority for new tech spending within the banking and investment services, underlining its leading position.

Results of the survey include the prominence of specific technologies in the banking and investment services when compared to all other industries, with AI, APIs and IoT standing out. The study found AI to be eight per cent more differentiating for banking and investment services.

“These priorities point to a continuing tension between two opposing forces… On the one hand, there is a need to rapidly transform the business, while, on the other hand, there is the innate inertia that arises from a huge IT estate that supports a heavily regulated industry… This is an industry that recognises that a firm must become truly digital – in culture, value and technology – if it is to stand a chance of surviving and thriving,” said Redshaw.

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Blockchain did not rank in the top 10 most important technologies for banking and investment services, while this may be surprising to some due to the energy and innovation surrounding it, it is not yet deemed ripe enough to have such a disruptive effect as other cutting edge technologies.

Senthil Ravindran, EVP and Head, xTech Labs at Virtusa, said: “Gartner’s figures show that banking CIOs are the most focused on digital transformation, as their ‘most important’ number one strategic business priority, above CIOs in all other industries. While banking is often unfairly maligned for being behind the curve, these stats show that it is in fact, one of the sectors most responsive to digitisation.”

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