A Sea Change in Financial Services IT

By Deva Annamalai, Director, Innovation and Insights, Fiserv

Deva Annamalai, Director, Innovation and Insights, Fiserv

1. How has your IT operating model changed during the last five years?

Across industries, organizations are much more open to the idea of moving toward cloud-based solutions that offer benefits such as faster deployment, reduced complexity, and scalability. We are also seeing the emergence of startups that are disrupting industries that historically had a high barrier to entry. These startups are being embraced by enterprises in a level of partnership we have not seen before.

2. What does analytics mean for banks and other financial institutions?

Analytics has always been important in the banking and financial sector. With the advent of big data storage and analytics, it has become even more crucial for an organization to stay relevant and successful in a competitive marketplace. I believe the analytics maturity of an organization will decide its ability to make strategic key decisions that will affect their margins in the short and long run. Specifically, for the first time in the history of commerce, there are players in retail and other industries (Google, Apple, Amazon, Facebook) that know more about customer behavior than financial institutions. 

“Being able to distinguish hype from reality and having the technical vision to reimagine financial services is something very crucial for technology leaders in banking to face the next decade”

Prioritizing analytics to understand customer behavior will be essential for financial institutions to be relevant. Walmart analyzes 5 petabytes of data in a day collected from its retail locations. Key insights derived from these analytics allow Walmart to optimize pricing at stores in specific geographic areas. Analysis of this scale is a completely new ball game that changes the way banks can interact with their customers.

3. What is the biggest challenge CIOs face while deciding to implement an analytics platform?

Building an analytics platform can be quite expensive in terms of manpower and infrastructure. Understanding the benefits and advantages of an analytics driven approach, convincing the management/board to invest into it and partnering with the right providers within budget are critical for long term success.

4. What set of skills do you think is required for technology leaders to be successful in banks and other financial institutions?

The banking and financial sector is more dynamic than ever before. The advent of neo-banks is a great example of how outsiders can re-think what a banking experience looks like, with the focus on customer experience while still using the traditional banking rails.

I believe every technology leader in banking should have an open mind to consider multiple view points and not be afraid to experiment with newer technologies. We are witnessing a sea change when it comes to revolutionary technologies like distributed ledgers and electronic money. Being able to distinguish hype from reality and having the technical vision to reimagine financial services is something very crucial for technology leaders in banking to face the next decade.

5. Which growing or future technology innovation are you personally excited about?

I am personally excited about the growth we are seeing in the distributed ledger technology (DLT)/Blockchain space. This technology has caught the attention of the financial services industry as a whole and we can sense the palpable excitement of the industry trying to reimagine financial services as well as question the existing processes that takes days and months to clear/settle. The DLT area in its current form is like the early days of the internet (remember Geocities, CompuServe?). 

We are working toward understanding the full potential of how DLT will change how commerce is transacted not just by humans but also by the automatons around us. The devices we use, own and consume from will start engaging with our environments in ways we cannot even fathom. We are already seeing the concept of payments taking a backseat with the advent of Uber and Amazon Go. Removing friction from these everyday interactions will play an important role in the design of financial services experiences. 

While I am personally excited about these new innovations, I am also a little worried about how we educate the next generation of our customers about fiscal responsibility. I believe as a society we have to figure out a way to educate our next generation about the value of money and how their actions can create causes and subsequent effects that can be good or bad.