By Frank Erickson, Co-Founder, 28Stone Consulting
Companies across the financial industry are employing various hybrid arrangements that allow employees to work remotely while spending a certain number of days in an office. Nearly 50% of workers are now back in an office environment to some extent after working remotely for more than two years. Gartner research has found that 69% of mid to large-size companies are requiring employees with jobs that can be done remotely to be in the office at least one day per week.
So, it’s no surprise that the model for software delivery in financial services has shifted too, whether it’s fintech vendors in London or financial institutions on Wall Street. Regardless of location, firms need to be flexible and nimble in their approach because software adoption is not driven through the in-person implementation process from yesteryear.
Old vs. New
Today, there is greater reliance on IT efficiency and software delivery teams. This has changed not only the way in which firms approach technology, but the hiring dynamics and, importantly, the way firms and their vendor and consulting partners construct a software roadmap.
Perhaps the biggest change has been the balancing act across responsibilities and how firms can remain within regulatory parameters. Regulators have been adamant about conducting reviews of software systems. This concern from regulators has led to requirements that are unfolding in the US, UK, Europe and Asia, ranging from MiFID and the iterations of the directive that have followed to the recent establishment of the Office of Innovation by the Office of the Comptroller to help develop fair and responsible regulation for fintech companies in the US.
The knee-jerk reaction by banks and financial institutions has been to establish a compartmentalized model to ensure different areas of the business are not duplicative or overlapping in any way. For instance, should a DevOps person be handling responsibilities that pertain to code development, or vice versa? While regulators will continue to perform their independent reviews of software systems, tech vendors must perform their own due diligence to avoid duplication – both in strategy and execution – and optimize efficiency throughout the software deployment process.
The Software Liaison
Although many firms in the financial sphere have changed their stance on working parameters, their reliance on technology continues to expand. With many of the big banks, including UBS, Citigroup, Wells Fargo, HSBC and BNY Mellon, adopting more flexible, hybrid working parameters, the agile methodology to software has garnered significant traction. Firms that forego this approach run the risk of venturing down a path on which they cannot turn back if a wrong decision is made.
The institutions that are finding success when partnering with a software vendor are appointing a dedicated individual to serve as the direct liaison of the delivery and implementation process. This individual is often the firm’s product owner but can be anyone with both strategic and technical knowledge.
This one individual plays a critical role. It’s somewhat of a quality over quantity approach. A subject matter expert that can serve as the “translator” of the solution and how it will run within the company is far more valuable than having an on-site team with moderate knowledge that is spread thin across other projects. It is important to have someone who understands not only the business and the processes that new software will empower, but also a partner that can provide a detailed, long-term view of how a software solution can evolve over time and respond to changes that are expected to transpire across the broader industry landscape.
The Software Personnel Shift
As the process changes, so do the people. While the roles of the Chief Information Officer (CIO), Chief Data Officer (CDO), and the Chief Technology Officer (CTO) have all changed with the amplified volumes of data, the changing role of the Chief Risk Officer (CRO) has been the most closely tied to the evolving approach to software delivery and the risks associated with it. A decade ago, there were a handful of financial institutions with CROs. Today, the majority of major financial firms have one.
There is also a far greater focus on cybersecurity now that hybrid parameters have become the norm. A VMware report from earlier this year found that 63% of financial institutions experienced an increase in destructive attacks, an increase of 17% from a year ago. The software delivery process and the personnel involved with it need to make sure security is top of mind during the initial consulting phase, the mapping out of the delivery, and the final deployment process.Successful software delivery is not solely reliant on individual technology talent. As the software that financial institutions leverage becomes more sophisticated, it’s critical that firms find delivery partners who have experience managing successful technology implementations and can help tailor a solution and a delivery model that aligns with what a business needs today and is agile enough to evolve with the ecosystem around it.