Due to a rapidly changing technology, security and compliance landscape, it is critical for top leadership to address a host of IT management issues.
The role of the chief executive officer has changed drastically over the past decade. Where CEOs once focused on such traditional duties as running the credit union and overseeing operations, they are now responsible for the overall health of the financial institution, which requires a deeper understanding of regulatory requirements, technology issues and even personnel and staffing challenges. To provide effective oversight of all operations and procedures, CEOs must focus on three key IT management issues to ensure their institutions continue to grow and are successful in the new year: efficiency and effectiveness, reducing risk, and gaining a competitive advantage.
1. Efficiency and Effectiveness
People: Successfully attracting and retaining top talent is key to running an efficient and effective financial institution. Credit unions often spend time and effort recruiting and training staff only to lose them to more competitive salary opportunities in the market. While credit unions are accustomed to planning for the departure of the CEO, president or other senior executives, the critical and pervasive nature of technology is leading many institutions to expand succession planning to include other key personnel as well.
The reality is that credit union CEOs must now have a plan in place to ensure that the sudden departure of a critical IT employee is a manageable event and does not present a major organizational crisis. Planning, cross training and automating manual processes ahead of time can help minimize uncertainty, prevent unnecessary stress and ensure continuity for the organization.
Technology: Technology solutions also play an important role in the efficiency and effectiveness of a credit union. When done correctly, implementing and utilizing the latest technology can significantly improve efficiency and speed within an organization. To achieve this, CEOs must support IT department initiatives to implement systems that include such key components as intelligent notifications, cloud support, automation and enhanced reporting functions. These features can help credit unions decrease costs, increase performance and improve their compliance posture.
2. Reducing Risk
Security: Cybersecurity represents a large component of a financial institution’s risk prevention strategy. CEOs must ensure IT staff are implementing the appropriate security layers to prevent viruses, spyware and other threats. Taking a proactive approach to creating a secure network environment is the best way to reduce cybersecurity risk. It is crucial to select security defenses and vendor partners that align with the credit union’s long-term goals and support IT and compliance strategies. Additionally, these security solutions will need to change over time as criminals’ strategies evolve. CEOs must ensure the institution stays on top of new and emerging threats to keep the network secure.
Compliance: In addition to managing security risk, CEOs must also make sure the organization is operating compliantly to meet examiner expectations. Regulators now pay close attention to issues around governance, security and IT solutions, and they have made it clear that the responsibility lies with the CEO to ensure the credit union is adequately protecting member data and is following all Federal Financial Institution Examination Council and Gramm-Leach-Bliley Act requirements. CEOs are also expected to participate in audits and exams. While it is usually the responsibility of an ISO (information security officer) to lead this effort, CEOs must work closely with the ISO and IT management before and during an audit and be prepared to work directly with auditors as well.
3. Gaining a Competitive Advantage
Today’s financial services environment is more competitive than ever, and keeping up with changing member expectations presents a challenge for many institutions. Members choose a credit union based on numerous factors, including location and convenience, quality reputation and its perceived ability to provide the services and products they want.
To be successful, the credit union’s strategy should focus on sources of competitive advantage that can maximize capital investments—that includes both operational efficiencies and research and development initiatives to create new services that set you apart from competitors. Partnering with a managed service provider can help eliminate redundant resources, reduce existing fixed costs by maximizing capacity and leveraging economies of scale, and add to existing internal knowledge bases. By integrating external resources, your organization may also be in the position to offer unique products and services not available elsewhere and thus gain a competitive advantage.
It is imperative for CEOs to find innovative ways to address changing member expectations and compete in a constantly evolving digital landscape. Successfully managing these IT responsibilities will help CEOs foster the long-term health of the organization, building the best credit union for the communities they serve.
To learn more about these three areas of IT management, download the whitepaper from Safe Systems.
Brendan McGowan is chief technology officer for Safe Systems Inc., Alpharetta, Georgia. McGowan oversees the development of strategic technology solutions that enhance financial institutions’ ability to manage IT in a compliant manner.