As mentioned last week, the CIO's role is changing from running an empire of maintenance engineers to organising a distributed development organisation. The change in the role is one from a hierarchical control structure, where everything is proprietary and internal, to a flattened organisation that is open and broad. Much of the developments will come from outside, as it's no longer developing for purely internal needs. In fact, as banks put their services on platforms and operate in marketplaces, they will be more involved in parts of processes than ever before but the good old days of owning the process have gone.
This means the CIO is moving the organisation through this change process from proprietary and internal to open and broad. It's moving the bank from a cathedral to a bazaar; from a monolith to a marketplace. That's the Change Agent piece: creating the new company where Banking-as-a-Platform leads the operation.
Banking-as-a-Platform I blogged about recently. It's the new hot trend that I wrote about seven years ago and is finally here. It's the ability to plug-and-play all of the banks functions and proceeds as apps through APIs. It's not just internal apps and APIs, but those of others. It's a whole new operation where the bank is part of an ecosystem of technology components. Mind you, the bank is the leader of those components as it is still the lead player in the marketplace with decades of development, millions of customers, billions of assets and a regulatory license. But the days of the bank being a completely internal and proprietary structure, or a law unto itself, are over.
The bank is now an integrator of components in the new marketplace of Banking-as-a-Service or Platform.
Once that Change Agent process is completed therefore, the role will change again. The CIO come Change Agent now becomes the Chief Conductor. The leader of the Bank-as-a-Platform must be a co-ordinator of many distributed parts. That is the conductor’s role.
The conductor must be able to see all from the back office (percussion) through middle office (wind instruments) to front office (strings) and get them to operate with perfect timing and in tune to the song they're playing.
It's not an easy role as some parts of the new bank platform have arrived from a different orchestra. There little time for practice and the orchestra must play 24/7. That is why it becomes so critical that the Conductor allows the developer-driven orchestra to each play their own parts. Each member of the orchestra owns their space. Some might play the odd bum note but, in the overall scheme of the music, it can be overlooked.
I guess it is the final piece in a long-term puzzle as, going way back when, I was told that organisational structures must move from hierarchical command/control, as used in the Army, to flattened coach/counsel, as used in families. Banks have resisted such change as they like to command and control. However, as technologies irresistibly move to distributed, open platforms and marketplaces, the large, monolith hierarchy structure is simply collapsing.
In other words, banks may keep their command and control in their physical structures (branch) but, in their digital structures they're just part of an ever growing family. They may be the biggest and oldest member of the family; they may be the daddy; but they've got to get used to letting others play and recognise that they no longer are in control. For this reason, the Chief Conductor is probably going to be the most important job in the future bank. They may have no people, they may have no organisation and they may have no control, but their sole purpose will be to make sweet digital music. I'd be up for that.
Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...