With a raft of legislation bearing down upon the banking industry, technological change is on the agenda. So, more than ever, executive committees must take responsibility to ensure that the change is a successful one, says Chris Skinner.

One of the by-products of the collapse of Enron and 9/11 has been a rise in corporate governance regulations. The Patriot Act, Sarbanes-Oxley, Basel II and other legislative manoeuvres all point the finger at every executive to be accountable for their organisation’s compliance. In banking, technology is a critical component in achieving compliance.

But technology cannot be operated in isolation; it has to be owned by the executive committee agenda. Without the committee’s full involvement, technology will not succeed as an enabler of compliance.

History illustrates why. Anything to do with enterprise change that involves technology has failed. Business process redesign, customer relationship management (CRM) and straight-through processing delivered massive gains for the few but, for most, resulted in over-runs, expense and failure.

Where these initiatives succeeded, every member of the executive committee was committed to the project. Technology was fully aligned with the business strategy. Many of these projects were personally managed by the CEO: their hands-on involvement inspired the enterprise to change.

However, the majority of organisations delegate change to specialists. “Oh, CRM, that’s a technology thing. Give it to the CIO,” they say. This moves the accountability from the executive team to an individual or an external vendor, neither of whom has the mandate or ability to achieve the change.

The only way the business can implement enterprise change is if the CEO’s personal leadership ensures that every senior executive is committed.

Sarbanes-Oxley and Basel II will now make every bank executive accountable for their bank’s operations. In a world of regulated accountability, the only way that practices can be proven is to ensure that every action is captured, indexed and stored in an enterprise compliance system. CEOs and executives will be forced to make change happen, without the ability to pass the buck to CIOs.

As a result, every executive team member will need to be aware of their system’s ability to support auditing. In so doing, they could take this as an opportunity to renew technology, improve service and grow revenue. The message is not to run scared of compliance and technology but to see them as opportunities to refresh, renew and transform the business for sustainable competitive advantage. Executives need to be committed and legislation will make sure that they are.

Chris Skinner is founder of Shaping Tomorrow and chief executive of Balatro Ltd. Find out more at www.ShapingTomorrow.com or e-mail Chris at chris.skinner@shapingtomorrow.com


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