There is no denying that there has been significant change in the finance and technology landscape over the past decade, and even more so in the last few years. As businesses navigate today’s complex digital terrain, there are many challenges that senior leaders need to consider, including:
- The rising power of the consumer. These days, consumers can readily change service providers who aren’t meeting their expectations. This places even more pressure on companies to ensure a top-class customer service and experience.
- Aging IT and technology core systems. Financial services organisations have had to grapple over the last few years with aging and legacy core systems and a proliferation of technology platforms gained over time.
- An increasingly complex regulatory and compliance environment. Today’s environment brings constant challenges and demands which itself brings consistent pressures and uncertainty into the mix of operational effectiveness.
To combat these pressures effectively, financial services organisations are demanding a new approach to acquiring IT and technology services, leveraging IaaS, PaaS and SaaS platforms to achieve greater efficiency, flexibility, cost control and transparency. While this is a logical consideration, it is important for today’s CEO to get it right and to navigate this new treacherous terrain carefully.
From my experience, here are 4 key considerations to getting ahead:
- Be prepared when forging into new territory
To meet this changing market where companies are demanding hybrid IT and technology solutions, many software vendors are now moving to a SaaS model. This means software companies are moving away from their traditional perpetual licencing model to a monthly or volume-based pricing model. This is a critical and complex transition that has the potential for significant risk.
The skills required to run a software business are fundamentally different to those required to run a hosting and managed services organisation, and vice versa. Therefore, it is critically important for the software vendor to work alongside a hosting company that has delivered and end-to-end service, and has extensive knowledge in delivering service to the financial services sector.
- Be accountable and responsible from the start
We’re often hearing financial institutions saying that they don’t mind how the software vendor delivers the service, as they are completely responsible for meeting the contracted service levels and compliance. While this makes sense in theory, in practice it is much more complex.
Ultimately the financial institution is responsible for meeting its regulatory and compliance obligations. While they can pass these requirements onto their suppliers, the ultimate responsibility still falls to the business, as it is their reputation that is damaged if the supplier fails to meet the standards in their contract.
- Be active in the processes and outcomes
To minimise the risk (and most importantly, to understand the risk), as an executive leader, you must take an active role in how the service will be delivered. What functions will the software provider deliver and what functions are outsourced? CEOs must also understand the level of experience each provider has in their specific area, and how they ensure they will meet your organisation – as well as the industry’s – standards.
The reputation of your business and your obligation to your customers and industry regulators require you to dig deeper to ensure your supplier’s ability to deliver, not just their ability to agree to contractual terms.
- Be a decision-maker with well-informed views
Don’t be afraid to ask lots of questions to make sure you are able to make an informed decision.
Ask questions such as:
- How do the service definitions of the vendor align with your organisational processes?
- How do levers in the roles and responsibilities effect regularity compliance, service, and contractual commitment?
- How are regulatory compliance requirements addressed?
- How is the engagement cemented into the contract?
Many organisations could benefit from utilising a managed service integrator who can steer the organisation through change.
As a CEO, it’s your responsibility to oversee all aspects of the business, especially those with potentially severe ramifications such as risk and compliance.