In five years, chief marketing officers will spend more on IT tools than do those who spend all their time on IT—chief information officers.
Those were the findings of Gartner in a highly publicized study conducted last year. The highlights make it clear that budgets allotted to CIOs and CMOs for IT needs face vastly different futures. Marketing budgets were expected to climb by 9 percent, compared to only 4.7 percent growth for IT budgets. This will allow marketing budgets to even further outpace IT budgets—they already have the lead (10 percent vs. 3.6 percent) when the metric measured is percentage of revenue.
While it's surprising news, what impact do those findings have on the lenders who may be reading this blog?
There's a clear connection, and it has to do with how different departments within organizations work together to manage customers.
"Inevitably, marketing is poised to exert even more influence over tech spending, but doing so without the solid foundation of a strong cross-functional collaboration with IT just doesn't make sense," wrote Lisa Arthur in an analysis of the study for Forbes last year. "Today's business environment is volatile, and we've lost what little margin there was for error."
She went on to say: "CMOs and CIOs alike must recognize that technology and marketing are now inextricably tied, and that future success depends on the creation of a totally new kind of cross-functional organization."
Let's elaborate further on Arthur's point, through the lens of banks.
Historically, customer-facing decision capabilities are not aligned with the holistic goals of banks. This means that whatever messages are being presented to them through marketing campaigns are either not entirely revealing of reality, or they may be unaware of what expectations the bank can actually meet.
A check is being written that cannot be cashed, no pun intended.
An example of this would be a potential borrower who is given the impression that he or she will be approved for a loan at a low interest rate, when in fact, the lender is unable to fulfill that initial promise.
Not only will this damage the bank's ability to provide credit in the future, it could actually cripple the public perception of the bank and its relationship with current borrowers as trust erodes.
So where does IT fit in?
Tools like advanced loan management software ensure that customers are properly vetted before a lender commits to a loan. The software will guarantee that the customer provides all the information needed to process a loan, which will lessen the likelihood that a miscommunication leads to default down the road.
In making the application process more regimented and predictable, loan management software also restores customers' faith in the lender. There's a reduced threat of inconsistent messaging from the marketing phase of the relationship through the actual execution of an agreement, which, again, only serves to undermine the relationship between the two parties.
Come 2017, even if CMOs are spending more than CIOs, at least loan management software will help put all departments of lending organizations on the same page.