How CIOs reinterpret their role through AI

As businesses digitally transform, technology is increasingly integrated into every activity, and the CIO is becoming more of a catalyst for data-driven value creation through analytics, new AI model training, software development, automation, vendor engagement, and more.

“It’s a role that requires dual technical and functional expertise,” says Giuseppe Ridulfo, CIO and deputy COO of Italy-based financial institution Banca Etica. “You need to speak both languages, technology and business, bridging the gap between these two functions.”

For Daniele Deligia, IT director of Italo-Nuovo Trasporto Viaggiatori, Italy’s first private operator of high-speed rail networks, the exchange of information between the CIO and other executives is good for business. For Italo, this IT-business dialog is based on a flexible IT infrastructure that includes numerous automation and AI components, and provides the necessary groundwork for business continuity.

A strengthening role in IT

“Real-time analytics, forecasting, and alerting capabilities enable us to intervene when problems arise and prevent disruptions,” says Deligia. These aren’t just the basic backup and disaster recovery protocols that already exist, but tools that measure every process and service on business-critical systems to verify they’re performing as expected.

Italo has invested in technologies for real-time performance monitoring, as well as some AI models that Deligia’s team is training and tuning with internal data for preventive and predictive actions.

“The fact that the site or application is technically performing adequately isn’t enough because despite the good performance of the site, sales or the result of a promotion aren’t as expected,” says Deligia. “With the systems we implemented, the data and trends are captured and analyzed in real time, and if there’s a discrepancy, alerts can be automatically sent to target audiences in specific business areas. At the same time, the AI’s predictive mechanism generates a forecast that highlights the deviation between what was predicted and facilitating the action to correct it.”

New tools of the trade for CIOs

Through automation at Italo, IT has seen a sharp reduction in open tickets for technical issues and the time it takes to resolve them. But the real benefit of advanced data analytics and automation tools is the dramatic reduction in business-critical system outages because IT is alerted before a blocking problem occurs. This improves business performance by protecting against potential revenue loss and ensuring a better customer experience, which is also critical to customer retention and acquisition.

Flexible, automated IT also provides an added benefit in connecting technology and business. “Today, I can provide managers in finance, sales, operations, all the way up to the CEO, with interactive dashboards, intuitive charts, and technical indicators that can be read by non-IT people to describe the health of the systems,” says Deligia.

And while it’s true this approach always puts IT’s work under the microscope, it also allows the business to react quickly without having to go back to the technical figures every time.

IT aligned for digital transformation

Banca Etica is also adopting a new culture that interprets IT as a partner to the business, and not as an IT manager. “This means outsourcing to a technology partner some IT tasks that aren’t core to the bank, and keeping in-house only what’s directly related to strategic goals,” says Ridulfo, who joined Banca Etica in 2017 and led the first two IT migrations, which laid the foundation to activate and develop the digital transformation project to transition from a traditional operator to one with mainly an online presence. Today, Banca Etica has 21 physical branches, about one per region in Italy, and the rest operate through digital channels and remote relationships.

The first step in this transformation was organizational. IT was divided into three parts: core banking, IT infrastructure, and data management, analytics, and AI. The second step was the shift to a larger IT service provider, which wasn’t a judgment on quality, but the ability of the IT service provider to support the bank’s growth. The third is the ongoing cultural shift revolutionizing not only how IT is viewed but the roles within the CIO’s team.

“The vendor provides the platforms to manage the web channel and applications, as well as the developers,” says Ridulfo. “But Banca Etica’s IT team communicates the business requirements to the vendor.”

It’s not just a passive role of translating the CEO’s requests, he adds. Having a thorough understanding of the infrastructure and the technical capabilities of the tools adopted, IT actively proposes updates, innovations or changes to the business functions that can add value. For instance, how onboarding is carried out is an example of technology implementations that improve business and customer relationships. With a previous vendor, Banca Etica used video calls to identify the customer during the process, a mode that was beneficial because it connected the operators with the potential customer, but had the limitation of working hours. “With the new vendor, we have another solution we decided to implement — the video selfie,” says Ridulfo. “It lacks the direct relationship with our operator, but it’s allowed us to extend the hours of the onboarding activity, and the result has been positive.”

AI as a strategic competence

In one transition from the old to the new vendor — in this case, to provide POS services to Banca Etica’s client merchants — Ridulfo used automation tools, this time with the data analytics and AI team, which developed an RPA product. The robot took the data from the old provider to the new one, producing new contracts, and sending them to about 700 branches and merchants with digital signatures.

This illustrates how CIOs today tend to share tasks with vendors while keeping strategic tasks in-house. In fact, Ridulfo’s team was responsible for data preparation and product training, while the RPA technology was purchased from a partner that also assisted his team with robot programming training.

“We did the data mapping and programmed the machine to retrieve the data, do the input, create PDF contracts with signature points, and send them to the customer for digital signature,” he says. “It’s very advantageous to use RPA, and they’ll continue to automate the low-value-added mechanical and manual tasks.”

Standard or customized products?

In his business continuity project, Deligia’s team of about 20 internal resources and the outsourced IT team is responsible for merging technical data, such as digital service operation logs, and business and sales data into a data lake. Advanced analytics systems then correlate and analyze it all, comparing them to pre-defined KPIs, resulting in information that’s more useful to IT than the usual technical logs to be analyzed. And it’s always the internal group that’s responsible to train the AI models.

Otherwise, Deligia uses commercial products that limit software development. His team intervenes with integration activities for existing systems, or fine-tunes and customizes when very specific functionality is needed. But he aims for a balanced mix of customizations and standard products on which low-code development modes can be applied because, as he says, the fewer components you develop, the faster you can react to changes in technology and the market. “Customizations are definitely the only way to get your company’s specific functionality,” he adds, “but they can give IT rigidity, whereas in today’s environment you need speed and responsiveness.”

Increasing dialog with vendors

Even if low-code doesn’t cover all functionality, large companies can sit at the table with vendors and try to forge changes in standard products, interpreting the needs of the industry and being a spokesperson for smaller companies as well.

“I think confronting technology vendors is part of the CIO’s job,” Deligia says. “Large vendors tend to overlook the fact that standard solutions aren’t always optimal for a specific industry. These multinationals think on a global scale and work on a ‘one size fits all’ basis. Recently, though, things are changing and some vendors are becoming more enlightened, even seeking input from CIOs to refine their products. For this reason, we must maintain a two-way dialogue with vendors, using all our efforts and a lot of diplomacy — qualities a CIO must possess.”

Ridulfo says he participates in development tables with vendors, from which new proposals for the company can emerge. For example, another opportunity under consideration is onboarding with recognition through Italy’s digital identifier SPID and electronic card CIE, which appears to be a viable option for the bank to increase accessibility and simplicity during the customer onboarding process.

So Ridulfo’s team is following the vendor’s entire evolutionary path for banking applications. Another innovation it’s considering for the end of the year or early 2025, is moving to an advanced electronic overdraft practice management platform. “In this process, there’s a lot of reading and data entry work that, instead, can be sped up by automation, starting with the VAT number. Not to replace people, but assign more interesting tasks for them, which becomes more strategic for the company,” he says.