5 Ways Canadian financial service firms can innovate with IT

An except from a recent report from ICTC shows some interesting ways banks and other institutions can improve customer service and win more business

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The best CIOs and IT managers understand that an optimized IP network is the foundation for a successful business, but for financial services firms, it’s a question of how you innovate on top of that foundation that proves challenging.

About two months ago the Information and Communications Technology Council (ICTC), based in Ottawa, released a report on the hiring needs and skills that will become critically important to financial services firms in Canada as they seek to realize the benefits of their IT investments. In addition to outlining key job titles and recommendations on how post-secondary schools can better meet financial service firms’ HR needs, the report offers a handful of ideas about where IT-based innovation makes the most sense. They’re worth reprinting here:

1. More efficient and cost-effective global payment systems. “Between 1999 and 2010, global payment volume increased to 330 billion transactions annually, with the highest growth occurring in electronic payments, which represented 85% of all non-cash payments,” the report says. New services like Square and Google Wallet may be among the ways financial services will tie into new forms of e-commerce.

2. The ability to meet the growing demand for disintermediation by providing consumers with greater online access to products and services. “Executives in various industries are increasing disintermediation channels for two primary reasons,” the report says. “It allows them to learn more from their customers and allows them to serve them more effectively.” What’s important here, of course, is that customers don’t feel forced into these channels but appreciate the more convenient alternative.

3. The infrastructure to meet ICT governance standards much more efficiently. According to the report, “ICT governance allows financial firms the ability to embed sustainable risk management practices internally, meet industry regulations and adhere to government compliance measures.” ITIL and COBIT are among the most popular ways to approach ICT governance.

4. The ability to reach unbanked markets globally through mobile innovation and application development. The ICTC report quotes the OECD, which says 75% of the world’s population has a mobile phone, yet only 30% of the world’s population has a bank account. We’re likely to see much more of this attempt of banks and related firms to spread their wings around the world in 2013.

5. Enhanced ability to deal with ongoing cyber insecurity emanating from hackers and cyber criminals. “Identity theft alone costs the Canadian economy $2.5 billion annually.10 In 2009, a combined 37% of all hacking incidents resulted in monetary loss or stolen information,” the report says. In other words, the safer the financial institution, the more likely they’ll see customers remain loyal and increase the amount of business they’re willing to conduct through it.

The complete report, “ICTC in the Financial Services Sector,” is available as a free download through the ICTC Web site. 

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