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Bank CIOs Report a Wide Variance in Information Management Effectiveness, According to Survey

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Banks split on whether they extract full value of information. Majority agree that investment in IM will continue to be low. Forward provided by Capco partner Mohit Sahgal

Bank CIOs report that under-investment in Information Management (IM) programs at their institutions is expected to continue, according to a report based on a survey commissioned by Capco and conducted by The Banker. Capco partners Mohit Sahgal, Sandeep Vishnu and Michael Pugliese were part of the IM initiative team that developed and analyzed the survey, resulting in the final report.

The report, “The data challenge: is your information management program thriving, surviving…or stumbling?,” analyses the results of a survey of U.S. Bank CIOs and technology professionals, who were queried on such issues as how they are coping with the challenges of managing their data, as well as their plans for the future. The IM programs directed by respondents covered most or all data areas – sales, operational, financial and risk. The survey, conducted between March and May 2012, focused on the effectiveness of IM programs across five areas: value, strategy, governance, technology and regulation.

Two-thirds of respondents reported that their programs were “just surviving,” indicating that CIOs are less than pleased with their current programs. At the same time, challenges relating to data have not slowed, and there is an ever increasing demand for high-quality data for commercial uses, as well as compliance and risk management. Respondents reported that banks largely believe that they need to improve their analytics capabilities and have additional work to do to optimize their governance models. In an interesting twist, the survey revealed most CIOs believe that their IM programs are capable of meeting increased regulatory requirements.

Mohit Sahgal, Capco Partner, North American Technology Practice said: “The effectiveness of bank IM programs can substantially impact the firm’s ability to derive value from its data, as well as support current and anticipated compliance regulations, and accurately align data programs to strategic business goals. Further, we believe that CIOs are increasingly responsible for ensuring deployed technology solutions are advanced enough to support the sophisticated requirements of effective IM programs.”

One key finding of the survey is that investment in IM programs by most banks has been at the lower end of the scale, with two-thirds having spent less than $25 million in the past five years, and the under-investment is expected to continue.

Key findings from the report also include the following:

  • Bank IM programs are relatively immature: At least half of bank IM programs are still quite immature and have been run for less than five years. Only 24% reported programs of more than 15 years.
  • CIOs hold most responsibility for IM: Of the respondents, 43% said that the CIO was the sole steward of the program, responsible for administering data management policies and procedures across the bank with the intention of improving business operation. An additional 43% reported that their programs were “co-owned” by the business side.
  • Respondents showed no agreement in assessing commercial value of programs: While almost half (48%) of respondents indicated that they extract maximum value from their information, one-third indicated that they do NOT extract maximum value.
  • Data analytics could be used more effectively: While one-third did say that they effectively used analytics, 38% believe that they do not, despite an overall agreement that the use of data analytics continues to grow in importance.

Sahgal continued: “It is clear that CIOs have to continue to apply considerable efforts to improving their IM programs. At the same time, bank executives are beginning to understand that effective IM programs can have tremendous commercial value and provide crucial competitive advantage to their businesses.”

For copies of the report or further information, please contact us.

About Capco
Capco, a global business and technology consultancy dedicated solely to the financial services industry. Our professionals combine innovative thinking with our unrivalled first-hand industry knowledge to offer our clients consulting expertise, complex technology and package integration, and managed services to move their organizations forward.

Through our collaborative and efficient approach, we help our clients successfully increase revenue, manage risk and regulatory change, reduce costs and enhance control. We specialize in banking; capital markets; wealth and investment management; finance, risk & compliance; and technology. We serve our clients from offices in leading financial centers across North America and Europe. To learn more, visit our web site at capco.com and subscribe to Capco's newsroom RSS feed.

About The Banker
The Banker magazine has been a trusted source of information on banking since 1926, and is read in more than 100 countries. It is based in London and owned by the Financial Times Group