As we step into a new technological era, the relationship dynamic between CIOs and CFOs has to adapt and evolve. These two pivotal roles must navigate working together to seize the opportunities and benefits of ongoing technological innovation while ensuring that daily operations continue to run smoothly.
With the rapid advancement of AI and the accelerating pace of innovation in financial services, it is now, more than ever, crucial for organisations to move beyond simply “keeping the lights on,” and proactively embrace transformation to stay competitive.
The evolution of the CIO/CFO relationship
The traditional misconception of these roles is that they work against each other, with an enthusiastic CIO wanting the latest in tech without considering ROI, and a staunch CFO saying “No!” without considering investments needed to move the business forward.
This is far from the truth, especially today. As the financial and technological landscape grows more complex, CIOs and CFOs are becoming increasingly aligned when it comes to making critical business decisions, such as determining which technologies to invest in and determining how the adoption of innovative tech will guide internal operations and strategies.
A recent Rimini Street-sponsored Censuswide survey of 255 EMEA CFOs and CIOs in financial services found that 87 per cent of respondents said they believe their relationship with their CIO/CFO counterpart has strengthened, allowing for better collaboration on modernisation strategies. This increased understanding is breaking down silos in the financial services sector, evidenced by 71 per cent of CFOs increasing their corporate IT budgets, recognising the demand for strategic IT investment as essential for growth.
What’s behind a strengthened CIO-CFO partnership
Rimini Street’s research found that there are three key factors influencing the growing bond between CIOs and CFOs in navigating internal and external pressures and driving greater ROI:
- Forty percent of those who said their relationship had strengthened pointed to an increased focus on security, compliance and risk as driving that bond. In an era of persistent cyber threats and an ever-more complex regulatory and digital landscape, making technological investments in silos is no longer an option.
- Thirty-nine percent said their relationship had improved due to proactive engagement with their counterpart. These roles are reaping the rewards of working collaboratively and the positive impact of a united front when making decisions - from internal operations strategies to the tech investments that will enhance their workflows.
- Thirty-five percent identified the need to quickly cut costs in a smart way as being the key driver behind their improved relationship, highlighting the successful blend of CIO and CFO skill sets and their alignment in seeking efficient, value-driven technological solutions that deliver measurable business impact.
When it comes to technology, nearly two-thirds of businesses in the financial services industry admit they are risk averse. Emerging technologies are being introduced thick and fast, and hard metrics aren’t always available. But instead of feeling frustrated with a lack of data, CFOs are leaning in as active participants, understanding how emerging technologies like AI and cybersecurity can drive strategic value, optimise operations and create new revenue streams.
The drivers behind investment decisions in the digital age
The Censuswide survey also found that 48 per cent of CIOs and 66 per cent of CFOs are involved in setting the budget, signaling a shift away from CFOs acting as strict gatekeepers of financial services budgets. This demonstrates the growing influence of CIOs in shaping the strategic direction of financial service enterprises.
However, CFOs still maintain greater budgetary control, guided by five key investment decision factors:
- Security (36 per cent)
- Ease of maintenance and support (30 per cent)
- Return on investment (29 per cent)
- Initial investment cost (32 per cent)
- Total cost of ownership (28 per cent)
The survey highlights the issue at the heart of financial services' digital transformation: balancing the need to optimise technological ecosystems while finding opportunities to save costs.
Unlocking ROI and innovating for the future
In order to achieve this goal, C-suites need to tackle three core areas:
- Ensuring high-value support for their mission-critical systems
- Optimising their current investments
- Transforming their organisation without disrupting day-to-day operations
These are certainly possible if companies have the time, capabilities and skillsets in-house. Yet even the most well-resourced enterprises can struggle to acquire the knowledge base and market expertise required to negotiate with multiple vendors, unlock investments or run complex change programmes single-handedly.
Given that, a key factor influencing investment decisions and technology strategies among C-suite leaders in financial services is the desire for better mutual understanding. If CIOs and CFOs can better understand and appreciate their counterparts' business areas, there is an opportunity for stronger collaboration. Notably, 80 per cent of CIOs believe that CFOs should enhance their technology expertise, while 80 per cent of CFOs feel that CIOs need to develop their business acumen. By dedicating time and effort to learn from one another, these C-suite leaders can achieve better alignment in their investment decisions, ultimately resulting in stronger outcomes for their businesses.
Moving beyond “keeping the lights on” for financial services success
Managing the balance needed to save costs while accelerating innovation is challenging. The Censuswide survey demonstrates a growing necessity for a shift in organisational strategy, moving IT beyond the traditional “keeping the lights on” approach and driving a pivotal transformation in the relationship between CIOs and CFOs. As the two leader types find better ways to collaborate and innovate, businesses in the financial services space will reap the rewards of emerging technology.
The most successful CFOs will be those who can evolve from viewing technology as simply a cost to instead being a key driver of strategic growth and innovation. And the most successful CIOs will be those who shift proactively from seeing the finance department as a gatekeeper to seeing it as the fuel tank they can help refill.
Relying on one another’s vision, expertise, and experience will ensure the most productive relationships between these C-suite powerhouses. Collaborating to reach their shared goals, they can drive modernisation, business growth and improved profitability, leading to a greater overall return on investment (ROI) for the business.
Recent Stories