Working together and wearing the right hats, the CFO, CRO and CDO have what it takes to move an organisation toward its new target operating model (TOM).

In my previous posts on this subject, we’ve talked about the disruption affecting the Financial Services sector, and what firms can do to survive—even thrive—amidst the change. One key area is an organisation’s back office functions and the need to become more sustainable and future proof. 

The solution we’ve talked about is establishing a Target Operating Model (TOM) that can help a financial business not just keep afloat, but seize a powerful advantage. My previous post talked about how the Chief Financial Officer (CFO) plays a leadership role in driving an organisation toward establishing a TOM.

But often the CFO can’t accomplish this seismic task alone. In this post, we’ll consider the roles a Chief Risk Officer (CRO) and Chief Data Officer (CDO) can play to support the journey toward a TOM.

Time for CROs to step forward

We’ve seen that the CFO needs to shift from being a technical specialist to being a leader.

The CRO should address an even greater shift. No longer is risk management simply a safeguarding function. It now has a more proactive role to play, as new risks, particularly those associated with digital disruption, emerge. The risk function will be crucial, not only to defend against threats and manage resilience, reputation, regulation, compliance and cybersecurity, but also to support growth and the business in a digital future. Nowhere is the demand for a robust, strategic approach to risk management more apparent than in the digital transformation of the banking sector. Entirely new business models are emerging, demanding digital risk management from a proactive, and not reactive position.

Defensively, recruiting talent to ward off cyber threats and competition from disruptive outsiders is vital. From a proactive perspective, increased progress increasingly hinges on a highly focused, customer-centric approach, for which the leveraging of new digital technologies and risk management strategies could be central. As it turns out, the biggest risk facing the CRO and organisation may be doing nothing.

CDO: Define analytics and insight strategy

The exponential growth and pervasiveness of data across organisations should have convinced the C-suite that, to leverage data, it first has to be controlled.  Once “tamed,” strategic sources of data can provide an organisation with not only customer insight, but also inputs for risk management, regulation, compliance and performance. To harness this and provide a clear vision, to build an ability to respond to innovation and digitalisation, and to support the organisation in leveraging data as an asset, the CDO has emerged as a critical role in any TOM. The CDO role is strongly emerging as a key facilitator for the CFO and CRO to deliver their vision and strategy.

Working together and wearing the right hats, the CFO, CRO and CDO have what it takes to move an organisation toward its new TOM.

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