A survey by Banking Director explores how bankers think about improving the customer experience, creating efficiencies and investing in the future.
NASHVILLE, Tennessee., August 30, 2022 /PRNewswire/ — As competitive pressures continue to change the landscape for financial institutions, Bank CFO 2022 Technology Surveysponsored by CDW, delves into the technology concerns and challenges facing banks’ senior executives and board members and where they have invested their resources.
Eighty-one percent of respondents said their bank increased its technology budget for 2022, reporting an average increase of 11% compared to 2021. Still, using technology to create a more competitive and efficient organization requires in-house know-how -how and nearly half of responding directors and CEOs worry that their bank lacks an adequate understanding of emerging technologies. Additionally, 45% say their bank relies on outdated technology.
“Nearly half of respondents cited large and super-regional banks as significant threats — and that’s not counting companies like PayPal, Chime and others that are making inroads into banks’ businesses,” says Emily McCormick, vice president of research at Banking Director. “The 2022 Banking Director Remuneration Survey, conducted earlier this year, found that technology talent is in high demand. I believe we can see a direct correlation between the need for in-house expertise and the industry’s ability to meet today’s challenges.”
The 2022 Technology Survey shows that most banks are hiring senior executives focused on technology, particularly in the form of a Chief Information Security Officer (44%), a Chief Technology Officer (43%) and/or a Chief Information Officer (42%). However, few have a chief data officer or data specialists on staff – although almost half express concerns that the bank is not using or aggregating the bank’s data effectively.
The competitive landscape
Fifty-six percent of all respondents considered local banks and credit unions to be their greatest competitive threat, followed by large and supraregional banks at 46%. A third worry about competition from big tech companies like Apple, while an equal number worry about competition from digital, non-bank lenders.
The hit-or-miss of digital apps
Nearly half of respondents say their bank has a fully digital process for opening retail deposit accounts, with larger shares representing banks over 1 billion dollars reporting so much. Far fewer respondents reported a fully digital process for retail loans, deposits, or small business or commercial loans.
Separation of generations
Only 25% of directors and CEOs surveyed say their bank has the tools it needs to effectively serve Gen Z, and half believe their institution can effectively serve millennials. Eighty-five percent said as much about Generation X, and 93% said this about baby boomers.
All in the cloud
Eighty-eight percent say their bank uses cloud technology to generate internal efficiencies; 66% use application programming interfaces (APIs) that allow different applications or systems to exchange data. Robotic process automation (32%) and artificial intelligence or machine learning (19%) are much less frequently used.
Three-quarters say their board or leadership team has discussed risks or opportunities related to cryptocurrency or digital assets in the past 18 months. Sixty-four percent say the same about banking as a service (BaaS), and 69% say about environmental, social and governance issues. Cannabis, according to 58%, is more often discussed in banks under 5 billion dollars of assets.
Views on cooperation
More than half of those surveyed view technology companies only as suppliers, as opposed to collaborating with or investing in these firms. Thirty-nine percent, mostly representing banks 1 billion dollars in assets, say their institution has collaborated with technology providers for specific solutions. Twenty percent participated in a venture capital fund that invests in technology companies, and 11% invested directly in one or more of these companies.
The survey includes the opinions of 138 independent directors, chief executive officers, chief operating officers and senior technology executives of US banks below 100 billion dollars in assets. Full survey results are now available online at BankDirector.com.
About the bank director
Bank Director reaches out to the leaders of the institutions that make up the American banking industry. Since 1991, Bank Director has provided board-level research, peer insights and in-depth executive and board services. Built for banks, Bank Director extends to and beyond the boardroom, providing timely and relevant information Bank director magazine, board training services and the premier financial industry event, Acquire or Be Acquired. For more information, please visit BankDirector.com.
Today, IT creates business potential, drives growth and innovation, but it’s not always easy to keep up with the latest IT advancements when you’re carrying a heavy load. CDW gets it. CDW Financial Services partners with leading technology companies to provide you with the state-of-the-art IT solutions you need to succeed and lighten your load. For more information on CDW visit www.cdw.com.
For more information, please contact the Bank Director Marketing Director, Deanna Whoat [email protected].