Dive Brief:
- Bank board members lack the knowledge and understanding needed to guide technology adoption as the financial sector spends billions on IT, according to a Wednesday report by Accenture.
- Only 15% of bank board members possess tech expertise, the IT consulting firm found in an analysis of more than 1,700 board members at the 106 largest global banks by assets.
- “It’s the responsibility of the bank board to make sure technology investment and transformation is done in a mature way with careful consideration for both the growth opportunities and the risks involved, whether it be cybersecurity, AI model risk or privacy design, which can have a material impact on the firm’s bottom line,” Andy Young, Accenture’s financial services talent and organization lead, said in an email.
Dive Insight:
Expertise among bank executives has increased gradually over the last decade, as banking has become a more tech-driven business.
One in 10 board members had tech knowledge in 2020, up from just 6% when the survey was first conducted in 2015. Yet a surprisingly large proportion of banks lack even one board member with tech experience — more than 1 in 5, according to Accenture.
The banking industry sits on the lower end of the spectrum relative to other industries in terms of boardroom tech expertise, the firm told CIO Dive.
“While one is better than none, a single technology voice in the boardroom can often be just a token,” Debra McCormack, board effectiveness and sustainability lead at Accenture, said via email. “Adding a second or third tech voice will encourage robust boardroom conversations to enable informed, strategic decision-making.”
A persistent gender gap hasn’t helped matters. Women represented just over one-quarter of all bank board members. However, one-third of women with board seats possess tech knowledge.
The benefits of cloud in driving innovation, agility and even security, coupled with a proliferation of fintech upstarts, has pushed the historically conservative financial service industry to ramp up modernization.
Citigroup announced the addition of 8,000 technologists to its transformation workforce during an April earnings call and reported its tech spending grew 12% year-over-year for the three-month period ending March 31. JPMorgan Chase appointed Teresa Heitsenrether as chief data and analytics officer last week to lead AI adoption throughout the organization.
The U.S. Department of the Treasury highlighted a broader banking modernization trend as part of a February report on cloud adoption in the financial services sector. While the agency expressed concerns over cloud business consolidation, it acknowledged that cloud adoption had reduced technology costs, enabled faster innovation and improved security and resilience in the industry.
