The challenge of the financial services sector CIO can be seen as balancing innovation with meeting the sector’s ever changing regulatory requirements.
However, a recent survey of such CIOs found that 86% believe regulation can be an opportunity to drive innovation. And 82% reported that they have used regulatory drivers to build a business case for innovative projects.
The report, backed by IT consultancy Xantus, quotes an anonymous respondent explaining that regulation promotes innovation when it leads to more strategic view of the organisation’s own information or processes. "If there’s an aspect of regulation which enables you to make a more strategic response, that’s the way to introduce innovation," they said.
That is not to say that meeting compliance requirements will necessarily lead to that strategic view. "Not every type of regulation lends itself to this," they remarked. "Where organisations do have a choice is whether to adopt a strategic response to regulation. This comes down to leadership.”
One challenge to realising this stategic view concerns personnel. More than half of respondents said their IT departments have lost "key innovators" in the last few years during cost reduction drives. Now, nearly all of them (97%) are looking to recruit IT strategists and systems architects.
The survey, conducted by consultancy Xantus, found that financial services firms spend an average 28% of their IT budget on meeting regulatory compliance requirements. The remaining budget is split equally between maintaining existing systems (36%) and innovative new IT projects to support business objectives (36%). Nearly all (96%) of respondents said their regulation-related spending has increased in the last three years.