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Why CFOs should collaborate with their CIOs

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It’s no secret that the financial services industry is heavily regulated, and that’s just one of the challenges the industry faces. In addition to the pervasive burden that the COVID-19 pandemic has brought to nearly every industry, financial services firms are also struggling to navigate deglobalization as well as digital disruption.

Renee Wells, Vice President of Product Strategy, Rimini Street

To succeed, financial services institutions must remain proactive and continue to promote innovation. As they align their budgets and resources with future goals for their business and operations, it’s vital to re-prioritize digital strategies to emerge victorious despite constant market volatility and change.

And to do that, it’s critical that Chief Financial Officers (CFOs) keep pace with Chief Information Officers (CIOs) and other technology leaders to keep innovation moving forward.

The reality caused by the pandemic

While the financial services industry has its own list of challenges, there is no getting around the fact that the global pandemic has created serious consequences. Recent PwC assessment industryoutlined a number of macro trends that financial services leaders need to understand as they develop their plans for the future. Among them: The COVID-19 recession will reduce the risk-bearing capacity of regulated industries, including financial services, to support the “real” economy as it enters recovery over the next year.

In addition, the firm says that low interest rates will continue to add a layer of volatility to business models and margins, while deglobalization will further align the size of financial institutions with the GDP of the countries in which they are located. PwC argues that this will lead to further offshoring and increased operational risk across the industry. Finally, the firm says the pandemic will not delay — and may accelerate — the development and implementation of regulatory measures in many countries and regions.

Prioritize digital innovation

Digital transformation is a priority in almost every industry, but it seems to be a little less important for financial services leaders. Recent Survey by Dimensional Researchof CFOs and CFOs found that 65% of respondents from finance and insurance organizations see investment in digital transformation as key to their business success. This is lower than any other industry covered in the survey; for example, 81% of manufacturing respondents said investing in digital transformation is vital to their success, as did 79% in the technology industry, 75% in retail and 73% in construction. When asked, financial services respondents cited optimizing existing technology investments as the top IT initiative they’d like to see from CIOs.

This is where CIOs can help their CFOs. Building strong relationships with CIOs not only helps CFOs drive more transformational innovation, but also helps achieve other broader business goals. The CIO is uniquely positioned to communicate which digital initiatives can provide the greatest ROI in the near term, as well as which projects should be shelved. Armed with this knowledge, the CFO can approach other decision makers and explain why driving digital innovation is important to the health of the business.

In most cases, especially in this environment, it is safer to focus on smaller initiatives that advance the digital strategy over time, as opposed to a long and expensive infrastructure overhaul that may not produce tangible results for three to five years (or more). Quick wins every few months add value to the organization and demonstratewhy behind digital transformation efforts.

Leaders must invest in their most valuable asset: their employees

As financial services companies—like nearly every other industry—reexamine their strategies in the post-pandemic landscape, it’s clear that the winners are investing in employees. Virtually every organization in the industry expects to allow their employees to continue to work remotely in some way in the coming year, which means that CFOs and their IT colleagues have the opportunity to help their businesses provide employees with the resources they need to stay productive while at work. remotely.

RecentResearch by Gartneron the digital future of finance, noted that the pandemic has proven that efficiency comes at the cost of flexibility, and that businesses need to fund the right investments to boost employee productivity in what is likely to be a hybrid workforce for the foreseeable future. This means providing employees with the equipment they need to stay productive, as well as making smart and efficient investments when it comes to the enterprise-wide systems that run the business.

According to the report, financial professionals and organizations have an opportunity to reduce waste and redundancy in this environment. I would argue that one way to do this is to not be swayed by vendors of ERP and other types of business software by overspending on the so-called “latest and greatest” upgrades. The truth is, what these vendors probably don’t want you to hear is that most businesses can stay as efficient, productive, and secure as they are—a major need for this industry—by maintaining the systems they already have, rather than investing in the latest versions, everything is just because the seller says it’s time to do it.

Digital transformation is not an all or nothing proposition. A more measured approach and incremental investment where it makes sense frees up funds for organizations to invest in other ways to promote employee growth, development and ultimately productivity.

After all, this is a key area where CFOs and CIOs can collaborate to support employee productivity and move their organization forward. As CIOs identify strategic areas where technology improvements support the business’ digital transformation aspirations, CFOs can illustrate to other executives why these initiatives make good business sense.

Renee Wells is Vice President of Product Strategy at Rimini Street. A 27-year veteran of IT and enterprise software with extensive experience in network engineering, management consulting, marketing and product management, she held several leadership positions at AT&T prior to her current position.

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