Bank Boards Talk Tech but Lack Expertise
November 10, 2022
Bank Boards and Technology
When it comes to planning for the future, technology remains a critical agent of change not only for banks but also for companies broadly. In the US, bank boards seem to realize this — according to Bank Director’s 2022 Technology Survey, 48% of bank executives surveyed from across the country said their board discusses technology at every board meeting, and another 40% said they do so once a quarter. However, this data grows less encouraging when paired with other results from the survey — specifically, when asked whether their board has at least one member who they would consider an expert in some area of technology, including digital transformation, user experience, and/or data analytics, 53% of respondents said no.
If that doesn’t send sirens ringing off in the minds of everyone reading this, there’s no telling what will. Essentially, what these two data points suggest together is that there is a lot of discussion about technology happening but very little expertise being injected into the conversation. That is a huge problem, one that means many of these institutions aren’t likely to get very far in leveraging new and developing technologies in ways that make sense, drive results, and ultimately futureproof their operations. As Bank Director’s report points out, while a bank’s board isn’t directly involved in decisions about technology, it needs to be able to align technology with strategy and ensure that the resources are available to achieve the organization’s goals.
Going forward, it will be critical to eliminate this gap. Without a supportive and understanding board, even the most forward-thinking executives will have trouble getting things off the ground, especially in advanced areas like data analytics and automation, which are very complex in nature and key to driving success in a digital-first environment. Developing a good data strategy, in particular, is a top priority for banking executives today, according to data from Deloitte. But doing so is a major undertaking that involves pulling together data from many disparate systems and creating common data models to drive actionable insights. Expertise to execute on projects of this scale cannot just exist within the bank’s walls; it needs a counterpart at the board level that can speak the same language. That expertise is necessary to communicate value and build consensus — even if it’s just one person who can translate for the room.