Remodeling the Financial Services Industry with IT Transformation

Todd Larson, CIO, Sentinel Benefits and Financial Group
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Todd Larson, CIO, Sentinel Benefits and Financial Group

Over the past few decades, the financial services industry as a whole has been witnessing a proliferation of pooled investment products. That revolution istransforming the manner in which people invest, firms distribute, and operate. It also challenges the way IT supports the business and the traditional paradigms of data management and dissemination.

Back in the day, you had a basic mutual fund with one class of shares. From there we have evolved to multiclass funds, hybrid products, hedge funds, various flavors of ETF’s, and even more complicated investment modeling and portfolio strategies. IT needs to think differently to respond. 

Today’s products are complex for sure, and building solutions for clients requires IT to have a deeper appreciation for the underlying investment vehicles, and what it takes to support them. Record keeping and accounting systems have to change. Compliance is an evolving challenge, CRM solutions need to adapt as new products have driven new sales channels and marketing opportunities as well. In the middle of the monster is more data that needs to be managed and turned into useful information. 

Furthermore, digitalization along withthe rise of mobile devices and distributed computing capabilities are challenging the way traditional players in the financial sector are interacting with their clients. The next-gen consumersare demanding smartphone and tablet experience, along with PC internet involvement. At Sentinel, our clients can interact with us in numerous ways. They can call on the phone or use the web from various devices. Our firm’s motto is “We care about how we can help” and that attitude is not only part of the firm’s culture but it extends to the way we interact and support our clients. We want our clients to have positive digital interactions with the Sentinel. Our solutions should be easy to use, secure and support today’s internet savvy customer’s need for ubiquitous computing.

  CIO is a position taker and actively advocates business strategy through the implementation of technology 

The Influx of New Age Tools and Service Models in the Financial Service Arena

As the technology landscape continues to evolve major parts of infrastructure continue to be commoditizedand new and different challenges are arising. The old model of having a data center with all your firm’s systems and data is going the way of the eight track tape. Like it or not,software companies, as an example, are creating products and supplying the environments for them to run in (and traditional infrastructure firms are packaging commercial software and storage).  All you need is the internet, a browser and a login. This is good news from perhaps an implementation and cost perspective but think of the security implications. Can you control the authentication? Where is your firm’s data hosted and what guarantees are there that it’s secure. The trend will continue and the ability to virtualize and compute across the internet will increase. This all drives at the importance of a solid IT vendor management strategy.  IT used to employ the staff that managed the environments it supported. Now those employees work for another or possibly many other firms. In some cases, the people managing your data and computing environments may not even be in the US. Understanding where your firm’s sensitive data is, and who has access to it is critical. Doing deeper due diligence on vendors, their data centers, and processes is part of IT’s job. IT has to think differently to use next gen architectures.

The Pre-eminence of Data and Its Management

So now a days, as systems are more and more disparate, across geographies and platforms, we in IT are in the data integration (DA) business. Not that we ever left the DA business, but today we need to work with 3rd parties to consume our own data. The nature of the data is relationally more complex as the industry creates product and services that never existed and that data is spread across hosted and in-house platforms. Dealing with these challenges takes new vision and strategy.  ETL and BI solutions (Extract Transform Load-data management tools and Business Intelligence interactive reporting solutions) are evolving and converging to assist businesses with this. Yes you can also buy these in a hosted flavor too.    

Consider a data management strategy that is customer centric. Understanding how customers of data interact with it, view it, transact and make decisions with it is an important perspective that should not be lost in data management strategy. CRM (Client Relationship Management) technology as an example is the place that houses all your customer data. Anatomically it’s the beating heart of revenue flow. At Sentinel, we have evolved CRM technology as not just a central storage of customer data, it’s also a place that manages documents, controls internal workflows and is a central point for more than just customer data. As a testament, every day most of the firm is using our CRM solution. CRM is our customer database. If we as a firm are going to know our customers and put them first, what better place is there to collaborate and do our work to support them.

Role of the Modern CIO

The role of a CIO is ever more vital these days. Between the evolution of technology, and in the changing financial services industry, it’s increasingly important to be well versed in multiple business and technology domains. Said another way, leadership requires continuous learning. Today’s CIO is a position taker and actively advocates business strategy through the implementation of technology. They are also a core technologist that understands infrastructure, development and data management strategy. CIO’s also need to be a savvy business person. They need to talk “business speak” with the CFO, CMO, CEO etc. and their staff about things like product, profitability, process and distribution.

Making and supporting all this evolution is not done in a vacuum. The CIO has to bring people together across an organization to be successful. A working “influence model” has to be established and nurtured overtime. That model has to include decision makers, proponents of change and critics to it. The CIO is part lobbyist too and they have to work with key people up and down the corporate org. chart. We are in the information business. Profiling and knowing the influencers in any organization is a particularly valuable tool.

One trend that is not going away and that is also indicative of having a good IT influence model is the proliferation of traditional ITservices across the organization. “If you build it they will come” solutions that allow the business access to interactive dashboards and reporting is igniting the demand for more hands on data access and management capabilities. Coupled with the newer tech smart generation coming into the workforce, the business is ever more close to their IT partners designing solutions and being involved in build versus buy decisions. Traditional career tracks are merging too. For example, operations people are becoming IT professionals and IT geeks are going native and becoming business people. It’s healthy and it builds capacities for the business overall and truly allows IT to contribute at tactical and strategic levels.

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