The banking industry is in the midst of unprecedented shifts that threaten to upend the business models of well-established institutions. Digital wallets, mobile banking, and finance apps allow giants like PayPal, Google, Amazon, and Apple to stake their claims in financial services.
A traditional physical banking presence won’t necessarily equate to success in the new environment of online banking with mobile access. Over the next few years, banks must engage customers in the digital realm to build loyalty, or risk losing them to those who will.
Anil Cheriyan, the executive vice president and CIO of SunTrust Banks, knows this as well as anyone. “The urgency with which change is happening around us in the financial services industry is unprecedented,” he says. The pace of new developments is faster than the industry has ever experienced.
“You can’t accept that you’re in the old back-office role and that it’s always going to take eighteen months to do anything. If you have that mind set, then you have already lost.”
The IT units at most large banks have been primarily focused on support, rarely driving innovation. That has to change, Cheriyan stresses. “We have to think of ourselves as an innovative startup,” he says. “You can’t accept that you’re in the old back-office role and that it’s always going to take eighteen months to do anything. If you have that mind set, then you have already lost.”
The Atlanta-based SunTrust, with assets of over $189 billion, is one of the largest financial-services companies in the United States. In recent years, it has added mobile banking options, including apps optimized for tablet and mobile phone users and the ability to interact with the bank via text. As more customers access banking services through these means, IT needs to help set the strategy, Cheriyan says. IT professionals know the capabilities of new technology that can deliver the features customers want better than anyone, so their input in business decision-making is critical.
People who say their preferred method of banking is via the Internet
Smartphone owners who use their phone to do online banking
US adults who do banking online
2 in 5
Americans use mobile banking monthly
With technology rapidly changing, though, no one can be sure what features will resonate with customers in the years to come. That’s why IT has to be more agile and innovative. For Cheriyan, getting his department to embrace rapid change and innovate through experimentation requires a profound cultural shift. After decades of primarily filling a reactive support role, such a transformation takes time and considerable effort.
“There’s a natural resistance and inertia,” Cheriyan acknowledges. Since taking SunTrust’s IT reins in April 2012, he’s remained heavily focused on catalyzing change, which starts with hiring people with the right skills and approaches.
“Talent is key,” he says. “I look for individuals who can think like bankers, focus on change, and can collaborate in a team setting. We look for builders at SunTrust. The rapid pace of change, competitive and market demands, and the evolving regulatory environment requires us to build—and to build fast. Individuals who seek a stable and maintain-only platform tend to underperform here.” Assigning the right people to the right roles is an ongoing, iterative process. “I’m confident that we have the right mix of talent now,” he says.
Still, a lasting cultural change can only be accomplished with widespread support within the unit. “You need the hearts and minds of everyone,” Cheriyan says. While business pressures make the need for change urgent, a leader has to allow the team time to adjust to the new mindset and have multiple strategies for fostering change.
One of Cheriyan’s first steps to drive this cultural change was to create “information collaboration hubs.” These online discussion groups gave some 600 to 700 IT workers the opportunity to ask any questions on their minds and promote in-depth discussions. At first, many queries had to do with big-picture issues concerning IT’s new culture. Basic matters, such as how IT would accomplish certain goals, how people’s roles would change, and how individuals could better contribute to setting business strategy, consumed much of the conversations.
The discussions gave Cheriyan opportunities to explain his vision and reinforce department goals. Over time, these forums have become more focused on specific initiatives, goals, and themes as staff acclimated to the new environment.
Another culture-altering program, called the rapid innovation special event (RISE), has helped to speed up the changing of hearts and minds as well as the creation of new features. RISE pulls together teammates in teams of up to six people—from both IT and business units—to participate in hackathons to develop new projects. They are challenged to develop prototypes that will require no additional funding, with a deadline of just three weeks. One project that emerged, for example, was a revision to a tablet application that allowed business clients to view their account data during weekly maintenance.
Cheriyan and his leadership team participate in more strategy sessions with business leaders than their counterparts did in the past. His top managers consist of five CTOs responsible for different areas of the business (mortgage, consumer, wholesale, infrastructure, and shared services), a head of strategy, a head of operations, a chief data officer, and a technology risk officer. Their involvement in high-level decision-making is critical for IT to accomplish one of its primary goals of better connecting technology investments to business strategy.
For instance, the current data transformation program requires “unprecedented collaboration and planning” among IT and all business units, Cheriyan says. The aim to transform how SunTrust stores, accesses, and uses data across the organization demands a well-coordinated effort.
“In this and many other cases, we are not just building an IT strategy or solution—we are building the bank we want to be for our clients now and in the future,” he says.
Cheriyan monitors various metrics to discern how much progress is being made in creating a more agile, innovative culture. “We map quality and pace of delivery of projects, for example,” he says. He then shares that information with IT staff and corporate officers. Staff evaluations also reflect how readily the department is adapting to the new culture.
“We discuss talent frequently as part of our management process,” Cheriyan says. “We make a conscious effort to raise the bar on both performance and potential in order to find gaps in talent. This drives our recruiting and development planning efforts.”
Transforming a culture takes years of effort. Cheriyan and SunTrust have come a long way, but there’s no sign of complacency. The rapidly changing financial-services environment demands that IT continue to shape the company’s future.