“In financial services, I see as much money wasted on technology as being spent on technology,” said Vincent Oliva, managing vice president at Gartner.
Prior to joining Gartner, Oliva co-founded and ran Capital Protection Insurance Services, an underwriting management firm dealing in alternative risk financing and reinsurance.
He also spent 16 years at Marsh & McLennan in New York City, as managing director with responsibility for the financial services and middle market practices.
Oliva also spent nine years at Irving Trust Company in risk management.
Would you say the traditional CIO is at a crossroads and now faces pressures from new arrivals such as the chief digital officer?
There are so many different ways of looking at it. Many will say the CIO really is the CDO, do you really need a CDO, what’s the difference between digitisation and digitalisation?
One of the first things I noticed when I joined Gartner was I stumbled upon Gartner’s 600-page acronym dictionary and two things the tech world tends to do is, one, put an acronym on things immediately and the other is to put labels on things immediately.
We came up with digital and then digitisation and then digitalisation, what does it all mean? Is it about technology? Is it strategy? And it is like most things in life: both.
We ask what is the real value to the business, what is the real value to the customers: the intersection of business and technology.
I have made several observations over my career at Gartner, one of them is that, especially in financial services, I see as much money being wasted on technology as being spent on technology.
I put a technical term on that: I call it buying the wrong stuff.
It is interesting from an IT point of view how much functionality is bought that will never be used. How there are disconnects between real and established business needs and the tech being built or bought for those needs. It is starting to get closer together but has been that way for a long time.
As I talk to clients over the years, I often find myself in conversations with technologists. Not necessarily CIOs, but they will ask me how do I implement this technology and I will honestly ask them a basic question: “Why are you considering that technology”? Many times the answer is they don’t know. It’s their latest project given to them. Before we answer questions about how to do it, I really think you need to go back to ask questions about why you are doing it.
In the coming years where do you see the major enterprise investments being made?
I think that big data has a lot to do with it. How big is big? The bottom line is companies are starting to figure out that there is no lack of data.
One way of putting it, they are data rich, information poor and knowledge starved.
The systems of the last several years have been designed to collect an enormous amount of data,but what do you do with it?
That’s where you get to the information part. How can that data be turned into useful information in the running of a business and then turn it into knowledge that can be put in the hands of the right knowledge workers to have that data have a direct effect on the bottom line.
I see two major goals. One is operational excellence, in other words to operate faster and cheaper.
The other part is to put the data to work back for the people it came from. All of this data is basically coming from customers.
A term that gets thrown around is customer centricity, what does that mean? Does it mean a bank teller gives someone a big smile instead of frowning at them? Or does it mean taking all that data we have collected on customers over a period of time and putting it to work for them?
So, it is about arriving at the digital moment?
Absolutely. One scenario could be a bank mining data and realising a customer is constantly spending money at the local garage on repairing an ageing car. The bank’s systems should talk to each other and the lending system could then underwrite a loan for the customer and inform the customer that they are eligible for new car finance.
It could go even further than that, the lending system could talk to the personal banking system and let the customer know that they could put a down payment on a new car that very day without affecting their cash flow. Through mining intelligence a bank could trigger a new relationship with a valued customer. That is digitalisation and the entire scenario is untouched by human hands. The technology is there to do this.
We are seeing this proliferate a lot more across many industries. They need to know what customers are spending on and what they could be spending on. It all starts with the data.
It is about turning the data that was sitting in a payment system, for example, into information that you can act on. It is about getting that information and the right knowledge and doing something with it to improve the bottom line.
Banks are also spending a lot on mobile and on apps. Some banks are building their own app stores.
How do you think the fintech revolution is impacting the traditional financial services sector?
One of the things that is happening is banks are starting to invest in fintech start-ups. The VC arm of the banks are making investments while some of the more aggressive one are starting to buy them. Many of the banks have innovation labs and are inviting fintech start-ups in to show their wares and the result might be funding or a purchase.
We are also starting to see different industries encroaching on banking, such as Tesco Bank. Telecoms firms are getting into the banking game in terms of mobile banking. Orange just bought a bank in Australia. There are a lot of these new entrants coming in and starting to zap up the banking revenue. Apple Pay was a big example – it is not just about payments – but about controlling the digital wallet, security around payments and charging banks 10-15 basis points for that extra layer of security.
The interesting thing about it, when banks pushed back and said what’s in it for us, Tim Cook told them it is a chance to be part of a great brand.
On the more mundane side, banks are updating core banking systems that have been running for 40 years, upgrading ATMs and branch renewal. The banks are asking themselves what should the branch of the future look like?
It might look different but there will be a place for the branch. The new millennials are doing more and more online and you need to have that channel, a mobile channel, but there is also a place for the branch as a place to sell services and consult with customers.
In terms of the wider IT industry, do you agree that we are firmly in the post-PC era?
I wouldn’t say the PC era is over and I wouldn’t say it is business as usual. I think it is probably becoming a little replaced by what we call the internet of things. The PC becomes another thing in the overall arena. We are seeing amazing things happen. In the oil and gas business and we are starting to see unmanned offshore oil rigs that are basically run by sensors with a constant flow of information from the oil rig to a central source. The overall point is that anything can be a computer today.
Look at GE manufacturing jet engines that have a constant flow of data back to GE on performance, troubleshooting 24×7. It’s not like there’s a guy in cockpit, not sitting with a PC, it’s all just happening
I wouldn’t say that the era of the PC is over but it is heading in that direction.
Buy your tickets now!