Technology Transformation Revamping the Leadership Roles in BFSI
Technology is one of the defining factors for strategic transformations in every sector and the BFSI sector has been the frontrunner in adopting these technologies be it AI, Automation or cloud capabilities for improving productivity, customer satisfaction and enabling faster time-to-market with new products and services. Additionally, technology has enabled a hybrid workforce and the BFSI sector is empowering this transformation to stay resilient in the face of radical work space transformation sweeping across the industry.
As workplace dynamics evolve alongside technology, so do job roles. There is now a pressing demand for leaders well-versed in technology, capable of strategically discussing the use and impact of key technologies to drive better business outcomes and inspire their teams to align with technological advancements. The fundamental objective of tech fluency and upskilling initiatives is to cultivate a comprehensive understanding of both current and future technologies and their potential applications across the organization.
Yet, many C-Suite executives still possess a knowledge gap when it comes to understanding the capabilities and implications of technology. Conversely, within technology-focused roles, there exist leaders with strong technical expertise but limited understanding of how technology translates into business value. This presents both a mandate and an opportunity for organizations to enhance the overall tech leadership and proficiency within the C-Suite.
According to early findings from Deloitte’s 2023 Global Technology Leadership survey, over three-quarters of CxOs reported that their organization’s board of directors encourages aggressive pursuit of technology-driven opportunities for competitive advantage, a significant increase from 60% in 2020. Moreover, 54% indicated that technology is a prominent agenda item in most or all board meetings.
Having a tech-savvy board, alongside a tech-savvy C-Suite, fosters a common language between the board and management, facilitating more productive engagement and enhancing company performance. Specifically, companies with such leadership structures experienced, on average, 5% greater revenue growth over a three-year period and 8% better stock performance year over year across three-, five-, and ten-year periods, as reported by Deloitte’s Center for Board Effectiveness.
From Tradition to Tech-Fluent – Leadership Roles Evolves in BFSI
In the digital age, sustainability has become a pressing concern for organizations, necessitating the recruitment of executives who are adept multitaskers and capable of swiftly implementing technology-driven innovations. The growing emphasis on robust risk governance and effective technology strategies is underscoring the importance of appointing C-Suite Officers across the BFSI sector.
Regarding C-Suite tech leadership, a recent survey conducted among Chief Marketing Officers (CMOs) revealed that 62% recognize the potential for marketers to enhance their impact by leveraging technology effectively to pursue growth opportunities and leveraging data insights across various channels. Similarly, Chief Financial Officers (CFOs) acknowledge the critical role of technology investments. According to Deloitte’s 2022 Q1 CFO Signals Report, 40% of CFOs identified technology-related enterprise transformations as the most significant initiative their companies were undertaking or planning. Many CFOs cited challenges related to outdated systems, a lack of business acumen among IT professionals, and a deficit in tech proficiency within the finance organization.
Talking along these lines, ObserveNow interacted with Nina Nagpal, Board Member of Bank of Baroda & Governance Advisory to know her thoughts on how technology is transforming the leadership roles. She responded and said that “In the financial services space, technology is a key focus area for both the regulator as well as the regulated entities. Its important to note that India is amongst a few markets where regulators – RBI and SEBI – have Regulatory Sandboxes to encourage innovation. The market participants can experiment with Fintech solutions. This encourages a number of constituents like Innovators, Fintech firms, market participants and service providers to come together to offer innovative technology solutions. Another excellent example of government’s technology centric orientation is the India Stack which has spurred technology penetration in the financial/banking sector in India but is also on the path to democratizing access to banking across unbanked populace.”
Talking on regulated entities and the security market, she added, “As far as regulated entities in the financial services space are concerned, technology, algorithmic solutions, tech driven security solutions are a necessity now. especially because the scale of our banks and securities markets institutions has grown many fold. The Banking industry in India today has technology as a key pivot as are entities in the securities markets. Large scale of operation necessitates not just smart applications, data management tools, straight through processing but also technologies that offer data and information security. Storage of data and cloud services have therefore become modern day utility services that businesses have to address on an ongoing basis.”
She emphasised that “Skilling and technology alignment, therefore is a logical need. However, entities and organizations are also rightly assessing what their core competencies are and where specialized tech services can be sourced from outside. Progressively and as AI and generative AI continue to take deeper roots, an assessment of talent needs must be done on a continuing basis.”
While conversing with another c-suite leader from the financial sector, Hrushikesh Mehta, SVP, Financial Services, ONDC along the same lines, he responded that “The main issue in India for leadership is to keep abreast of the rapid developments in technology on multiple fronts regardless of whether it is public or private technology. The other main issue is to determine timing for adoption. With some technology you are able to leverage immediate results. With others it is a longer term play where results may not be seen immediately but can have far reaching impact on long term competitive edge. Resources are limited and the decision about if and when to adopt technology become a key decision in any company’s journey.”
Gen AI – A New Wave Pushing Technology Adoption
According to IBM’s global c-suite survey, Three out of four (75%) of CEOs believe the organization with the most advanced generative AI wins. Gen AI is the new game changer for organisations not just in BFSI but in every other sector. Gen AI has been the talk of the town since the launch of its most popular application ChatGPT in November 2022. Talking to
Nina Nagpal, Board Member of Bank of Baroda & Governance Advisory around the similar discussion, ObserveNow explored that “While acknowledging that Generative AI will bring transformative changes, i do not think this is a binary outcome i.e. Generative AI versus human decision making and skills. Generative AI, over time, may match the human brain but the conscious human mind will remain our exclusive preserve. Service Industries will continue to need human intervention, connect with customers and problem solving.”
Hrushikesh Mehta SVP, Financial Services ONDC explained how Gen AI can be leveraged to drive revenue growth and said, “Generative AI like any other technology is a tool that can be leveraged to gain cost efficiencies or drive revenue growth. Again, this tool is in the early stages of development and where to deploy it so that it is effective will be very important. There is no question that the usage of this will grow with time. But at the end of the day it is a smarter automation tool. In its base form that’s what technology has always been.”
To hear from experts like Nina Nagpal, Hrushikesh Mehta and many more join the Iron Mountain presents ObserveNow BFSI Confluence on 19th April 2024 at Taj President, Mumbai.
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