Strategic utilization of information technology within retail banking

The use of technology-based solutions is one of the key response mechanisms that retail banks utilize globally to address legislative and regulatory requirements, customer products and service requirements, as well as day-to-day operational effectiveness. In order to be effective, technology-based solutions have to be aligned with the prevailing business objectives, business models and competitive strategies. The strategic alignment of business objectives and IT functions entails several key elements, namely, an Information technology strategy that is in synch with the business strategy; a governance structure that ensures the right decisions are made at the right time; IT architecture that is standardised and well-integrated; adequate management and support for the operational IT aspects; and continuous maintenance of the strategic alignment, through periodic reviews and updates. This paper reports the findings of a research project that was executed to test the applicability of the key elements of strategic alignment and management of information technology in a banking environment. The research was conducted in one of the largest retail banks in South Africa. The organization´s current status was analysed in comparison with best practices. The results show that the research environment is at various levels of maturity in implementing the identified key elements of strategic alignment. Some elements are well established and show benefits, while others require more focus. The gap areas identified during the research are highlighted and recommendations are made as part of the research conclusion.