The Bank Director Survey examines how bankers think about enhancing the customer experience, creating efficiencies and investing in the future.
NASHVILLE, Tenn., August 30, 2022 /PRNewswire/ — As competitive pressures continue to change the landscape for financial institutions, the Bank’s director Technology Survey 2022sponsored by CDW, examines the technology concerns and challenges facing bank executives and board members, and where they have invested their resources.
Eighty-one percent of respondents say their bank increased its technology budget for 2022, reporting an average increase of 11% compared to 2021. However, using technology to create a more competitive and efficient organization requires insight internal and almost half of the responding directors and executives worry that their bank lacks an adequate understanding of emerging technologies. Further, 45% say their bank relies on outdated technology.
“Nearly half of respondents point to large and super-regional banks as significant threats — and that’s not to mention companies like PayPal, Chime and others that are gobbling up the banking business,” he says. Emily McCormick, vice president of research at the Bank Director. “The Bank CEO Compensation Survey 2022, conducted earlier this year, found that technology talent was 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 employ senior executives focused on technology, particularly in the form of a chief information security officer (44%), chief technology officer (43%) and/or chief information officer (42 %). However, few have a chief data officer or data scientist on staff – despite nearly half expressing concerns that the bank is not effectively using or collecting bank data.
Key findings
The competitive landscape
Fifty-six percent of all respondents see local banks and credit unions as their top competitive threat, followed by large and superregional banks at 46%. A third worry about competition from big tech companies like Apple, while a similar number worry about competition from digital, non-bank business lenders.
Hit-or-Miss In Digital Applications
Nearly half of respondents say their bank has a fully digital process for opening retail deposit accounts, with the largest shares representing banks over 1 billion dollars reported as much as possible. Far fewer respondents report a fully digital process for retail loans, deposits or small business loans, or commercial loans.
Generational divisions
Only 25% of directors and executives 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 say the same about Generation X, and 93 percent say the same about baby boomers.
Everything in the cloud
Eighty-eight percent say their bank uses cloud technology to generate efficiencies internally; 66% use application programming interfaces (APIs), which allow different applications or systems to exchange data. Robotic process automation (32%) and artificial intelligence or machine learning (19%) are used much less frequently.
New Frontier
Three-quarters say their board or management team has discussed risks or opportunities related to cryptocurrencies or digital assets in the past 18 months. Sixty-four percent say the same about banking as a service (BaaS), and 69% say the same about environmental, social and governance issues. Cannabis, in the minds of 58%, was discussed most often in banks under 5 billion dollars of assets.
Views on cooperation
More than half of respondents see technology companies only as vendors, as opposed to collaborating with or investing in these firms. Thirty-nine percent, representing mainly banks 1 billion dollars in assets, say their institution has partnered with technology providers for specific solutions. Twenty percent have participated in a venture fund that invests in technology companies, and 11 percent have invested directly in one or more of these companies.
The survey includes the views of 138 independent directors, chief executive officers, chief operating officers and senior technology executives of the US banks below. 100 billion dollars in assets. Full survey results are now available online at BankDirector.com.
About the Bank Director
The Bank Director reaches out to the leaders of the institutions that make up America’s banking industry. Since 1991, Bank Director has provided board-level research, peer-to-peer insights, and in-depth executive and board services. Designed for banks, the Bank Director extends inside and beyond the boardroom by providing timely and relevant information through Director of the Bank magazine, board training services and the premier financial industry event, Take or Be. For more information, please visit BankDirector.com.
About CDW
Today, IT creates business potential, drives growth and innovation, but it’s not always easy to keep up with the latest IT advances when carrying a heavy workload. CDW understands. CDW Financial Services partners with leading technology companies to bring you the latest information technology solutions you need to succeed and lighten your workload. For more information about CDW, visit www.cdw.com.
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For more information, please contact the Bank’s Director of Marketing, Deahna CiliIN [email protected].
SOURCE BankDirector.com