IT Governance in Finance Sector: Is it Important?

With the advancement of technologies and innovation, information technology (IT) governance has dramatically increased in importance inside enterprises and organizations. IT governance has developed into a resource for any business and is now regarded as essential to achievement and revenue generation. Workforce and intellectual capital play significant roles in how IT governance is accepted and implemented.

According to a recent study, businesses who follow IT governance principles have profit levels that are 20% greater than those of businesses that don't. It should come as no surprise that the majority of firms are now seeking to implement IT governance standards and strategies in order to improve performance.

Several explanation on how IT Governance can support organizations in delivering optimum business performance. Firstly, organization should be able to manage complexity and competitiveness of the modern corporate environment, which makes it largely reliant on information technology to maintain efficiency and competitive advantages. Secondly, IT Governance should be able to implement effective .

The Information Systems Audit & Control Association (ISACA) has defined IT governance as “a structure of relationships and processes to direct and control the organization in order to achieve the organization’s goals by adding value while balancing risk versus return over IT and its processes”

The ever-changing business environment requires vast best practices and frameworks. Multimatics is ready to support your business with experts and frameworks in ISO 27001 Certification, ISO 31000, COBIT®2019, and many more. Learn more how Multimatics can deliver the best solutions for your organizations in IT GRC here.

IT Governance in Financial Sector

According to financial sector's critical importance, it is imperative to identify IT governance concerns as soon as possible. There is, however, a clear lack of scholarship on IT governance challenges, both generally and specifically in the context of the financial industries. With the rise of cloud computing, increasing use of data analytics, and increasing demand for agile IT Governance force banking institutions to meet the changing needs of the business. Yet, some are unsure where to start.

However, several challenges to implementing IT GRC in financial sectors are facing the complexity of the financial industry, with its many regulations and compliance requirements. In addition, the rapid pace of change in the IT industry, which can make it difficult to keep up with the latest security threats and compliance requirements. Finally, organization need to balanced out the costs provided for the IT GRC efforts with the benefit.

Despite these challenges, IT GRC is essential for financial institutions

4 Examples of IT Governance Implementation in Financial Sectors

Here are some examples of IT Governance strategies that have been implemented by 4 notable banking companies!

1.   Standard Chartered Bank

Standard Chartered Bank has a centralized IT governance function for developing and implementing its IT governance policies and procedures. The function also provides training to IT staff on the bank's IT governance policies and procedures.

2.   DBS Bank

DBS Bank has a risk-based approach to IT governance. The bank's IT risk management framework identifies and assesses IT risks, and then implements mitigation controls to reduce the likelihood and impact of those risks

3.   Citibank

Citibank has a dedicated IT governance team for developing and implementing its IT governance policies and procedures. The team also conducts regular audits to ensure that IT is being managed in accordance with the Citibank’s policies and procedures.

4.   Bank of America

Bank of America’s IT governance framework includes a board-level IT committee, a risk management framework, and a change management process. The framework is designed to ensure that IT is used in a secure, reliable, and efficient manner.

Strengthen your IT Governance strategy for better service delivery and optimum performance

The ever-changing business environment requires vast best practices and frameworks. Multimatics is ready to support your business with experts and frameworks in ISO 27001 Certification, ISO 31000, COBIT®2019 training, and many more. Learn more how Multimatics can deliver the best solutions for your organizations in IT GRC here.

With the right framework and mature IT resources, financial institutions will be able to perform stronger risk management in all areas and ensure their customers and stakeholders with a secure digital environment and platforms to use.

References:

Alansari, Y., & Al-Sartawi, A. M. M. (2021). IT governance and E-banking in GCC listed banks. Procedia Computer Science, 183, 844-848.

Arthur, K. N. A. (2017). Financial innovation and its governance: cases of two major innovations in the financial sector. Financial innovation, 3, 1-12.

Khamees, B. A. (2023). Information Technology Governance and Bank Performance: A Situational Approach. International Journal of Financial Studies, 11(1), 44.

Vugec, D. S., Spremić, M., & Bach, M. P. (2017). IT governance adoption in banking and insurance sector: Longitudinal case study of COBIT use. International Journal for Quality Research, 11(3), 691.