United States

Structuring IT staff to encourage innovation and support growth


For senior executives at banking and credit unions, growth is by far their top priority1. Yet numerous surveys and reports examining the utilization of information technology in a range of industries indicate a discrepancy between IT budgeting and company goals. Most companies dedicate much of their IT resources to simply “keeping the lights on” rather than to innovation.

The role of the IT professional has never been more important than it is today—and that level of importance will rise as new technologies are developed and security needs increase.

As a financial institution grows, its IT staff should keep pace in order to provide adequate services. While many institutions understand the need for innovation, bank executives may not have an in-depth understanding of its staff’s capabilities—or how best to utilize them.

Identifying the need

On average, the banking and financial services industry is second only to Internet service providers and software publishers in IT spending as a percentage of revenue—about 6.3 percent. How the money is allocated is another matter.

An institution’s leadership may see the writing on the wall—a competitor’s mobile application, the increasing number of transactions being completed—and may conclude that their bank’s IT environment needs improvement. Is the bank ready to establish a chief information officer role? The answer depends on a number of factors:

  • Level of institutional complexity

  • Size of the institution’s IT footprint

  • Level of innovation to attain

  • Cultural comfort with new technology

  • Level of scrutiny by examiners

Once these factors are examined and the future IT state of the bank is identified, management will want to turn to examining the current state, including the number of existing IT staff and the experience level of its individual members. Management may find that the experience level of the staff is not adequate to meet its goals; it may also find that the bank is not leveraging the staff’s talent in a way best suited for the needs of the institution. The institution may also feel stronger leadership is needed for IT to evolve.

Structured for service

The complex nature of the services that IT provides—for both the bank and its branch services—often necessitates IT splitting duties across entities (Figure 1) led by a chief information technology officer.  Often, IT divisions can be better aligned to facilitate separation of duties and a better focus on the most critical areas identified.

Figure 1


Following are highlights of each function within the IT organization as well as the critical capabilities they will need to employ:

Business systems: The business systems group performs key work for IT as a whole. The group’s director should lead a strategic initiative to create a mission, vision and three-year rolling strategic plan, to be revised annually.

  • A solutions development group within business systems would lead application, SharePoint and software development.

  • A business intelligence group would address data warehouse development, reporting and business intelligence analytics.

Shared services: Managing assets should be a major focus area in IT shared services, handling how bank IT orders, receives, tracks and monitors all IT assets. There also should be a focus on risk and compliance management, with help from the chief information security officer. A training coordinator should help IT employees understand their career paths.

IT operations: To facilitate effective service, operations staff can be allocated by level of user need, from simple self-service solutions and help desk support to more complex application support and infrastructure services. Ticket escalation to these groups should follow a well-documented process.

Enterprise architecture: This group would be a key enabler for the organization as a whole. A typical IT organization should be structured with solution and domain architects throughout the organization, and all reporting in a dotted line to a chief enterprise architect.

Project management: This office would bring structure and support to evaluating, justifying, defining, planning, tracking and executing projects. The function would standardize project management practices, including implementing and using standard tools, facilitating IT portfolio management and determining methodologies for repeatable processes. A director should lead a strategy initiative and create a mission and vision for employees to understand and get behind.

Information security: The creation of an information security office can help place the appropriate focus on securing bank IT resources and information. A chief information security officer would be responsible for aligning security initiatives with bank projects, programs and business objectives, while ensuring that information assets and technology are adequately protected. Security staff would be responsible for establishing and implementing security-related policies as well as security technology infrastructure. Managing business process controls should be led by this group, with the cooperation of IT operations, business services and shared services.

Staffing allocation

The industry average staffing by area, assuming in-sourced staff in IT, does not necessarily vary by the total size of the institution (Figure 2).

Figure 2


Metrics of success

You can’t manage what you don’t measure, so it is critical that management puts the right metrics in place to track progress and motivate staff. In many financial institutions, however, the IT department is not measured on its ability to resolve issues. People are not held accountable and management doesn’t know if their IT services and processes are working as they should be.

So if bank management has determined it wants to move to a new technology, for example, the appropriate performance measures will help determine if they have enough people with the right experience in place—or if they need to hire more personnel or outsource.

Going forward

In order to quickly get in place a more industry-standard and dynamic IT organization, some banks may need to consider interim solutions, such as outsourcing some difficult-to-find roles, such as information security, IT operations or project management. Over time, these can be brought back in-house or established as an ongoing solution.

For example, given both the importance of IT security and the difficulty in finding the right people for these in-demand jobs, banks may want to consider creating an outsourced or contract team in the interim while beginning a search for a chief information security officer and security managers and analysts.

As in any industry, however, it is important for management to keep attracting and retaining top talent. Technical career paths, industry standard job titles and an increased number of specialized roles will alleviate many employee concerns regarding their own potential obsolescence at the bank. Keeping IT personnel engaged with relevant and important roles to play will go a long way towards keeping them with the bank—and helping the institution remain competitive.

“Market & Technology Trends in Banking, NA, 2015” Gartner