The Swiss CIO Barometer: overview of early studies

Since 2015, the IFZ has been sounding out the investment and operational intentions of the CIOs.

In an attempt to capture the current digital trends and developments in the Swiss banking market, the CIO Barometer was conducted for the third time by the Institute of Financial Services Zug, IFZ, in 2018. In particular, the survey focuses on the way Chief Information Officers or other IT responsible at Swiss banks perceive digitization and technological progress to be affecting their business. Besides helping to identify potential challenges posed to the industry, the results of the survey shed some light on how and the degree to which challenges are being counteracted on a strategic and operational level. In this article, however, the focus is set on the developments in the surveyed banks’ priorities over time*.

The CIO Barometer is based on the IT Balanced Scorecard concept by Van Grembergen and Saull (2001) which, as opposed to focusing solely on financial targets, also seeks to develop and monitor a balanced set of non-financial measures. These include, for example, the regard for customers, processes or the degree of innovation. In the case of the CIO Barometer, four separate dimensions are applied for the analysis, i.e. operational excellence, user orientation, business contribution, and future orientation. As illustrated in Figure below, each of the four dimensions is supported by three indicators, the survey participants were asked to rate on a four-point scale according to their importance for the current year**.

As this article seeks to highlight the trends and developments over all three surveys, from 2015 to 2018***, a comparison of the scores given to each indicator over time provides useful insights into changing IT priorities at Swiss banks. Due to the small sample size, the different sample composition over the years, and the qualitative nature of the survey, however, the results must be interpreted with caution.

The figure below illustrates the assessments of importance for the respective current years. The only indicator which, according to the results of the surveys, has slightly lost importance over the period analyzed is the « adoption of new regulatory requirements”, which was given greater importance in 2015 and 2016 than in 2018. The stable and overall high significance of the indicator demonstrates the responsibility for Swiss banks to adhere to the flow of new regulatory requirements. In other words, regulation seems to have become an important part of day-to-day business for Swiss banks in recent years. This is likely to continue to be the case in the future, as according to a study by Ernst & Young (2019) only a minority of Swiss banks expect the financial sector to be less regulated in the future. All of the remaining eleven indicators have gradually increased in importance over the time period.

From 2015 to 2018, the highest absolute growth in importance (+0.64) can be identified for the indicator to “secure and develop required resources (staff & skills)” within the “Future orientation” dimension. This could be due to the fact that Swiss banks have relatively few IT competencies in-house, as a consequence of the high outsourcing level. As pointed out by Ankenbrand et al. (2019), only seven percent of Swiss banks’ labor costs are IT-related. Maintaining or developing these talents, therefore, appears to be crucial for banks to be able to innovate in the future. The indicator “digitization/optimization of business processes” within the “Business contribution” dimension gains the second most in relevance (+0.34) between 2015 and 2018.

This ties into the findings of a survey conducted by the Swiss National Bank (2019), which shows that existing business processes at Swiss banks will be severely affected by digitization. The Swiss banks, therefore, seek to increase their digital maturity in order to reduce costs and maintain their attractiveness for customers. “Multi-channel distribution” and “client experience/usability” within the “User orientation” dimension are two further indicators which have also seen a significant increase in importance (+0.26 and 0.25, respectively) over the years. This shows that, in addition to the importance of future-oriented resource policy and the optimization of business processes, Swiss banks are increasingly prioritizing the actual needs of their customers. |

* For additional information, see IFZ FinTech Study 2019.
** One exception is the indicator “reduction of time-to-market of new products and processes” within the dimension “Future orientation” which was not included in the survey in 2015.
*** The CIO Barometer was not conducted in 2017.

Prof. Dr. Thomas Ankenbrand
Institute of Financial Services Zug IFZ

Denis Bieri
Institute of Financial Services Zug IFZ

Nicola Louise Illi
Institute of Financial Services Zug IFZ

 

More about the last edition of the Swiss CIO Barometer here.

 

REFERENCES
• Ankenbrand, T., Bieri, D., & Dietrich, A. (2019). IFZ FinTech study 2019: an overview of Swiss FinTech. Lucerne University of Applied Sciences and Arts- Hochschule Luzern, Business.
• Ernst & Young (2019). EY Bankenbarometer 2019 – Zeichen der Zeit.
• Swiss National Bank (2019). Survey on Digitalisation and Fintech at Swiss Banks
• Van Grembergen, W., & Saull, R. (2001). Aligning business and information technology through the balanced scorecard at a major Canadian financial group: its status measured with an IT BSC maturity model. In Proceedings of the 34th annual Hawaii international conference on system sciences (pp. 10-pp). IEEE.

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