Led by donkeys: Bank boardrooms lack computer literacy

Led by donkeys: Bank boardrooms lack computer literacy

While banks are ramping up their technology investments to keep pace with changing consumer demands and competition from challenger brands, their boards of directors lack the technology expertise to minimise the risks and maximise the benefits of their IT spending, according to a report by Accenture.

Based on an analysis of the professional backgrounds of nearly 2,000 directors of more than 100 of the world’s largest banks, the report finds that only 10% of all board directors, as well as 10% of CEOs, have any professional technology experience.

In addition, the number of banks whose board has at least one member with professional technology experience has increased only 10 percentage points in the past five years, from 57% to 67% ― meaning that one-third of banks still have no tech savvy directors sitting on the board.

“Much of the disruption brought about by the pandemic has led to a rapid shift within banking to more digital touchpoints, requiring speedy technology investments,” says Mauro Macchi, who leads Accenture Strategy & Consulting in Europe. “Banks that are accelerating their cloud adoption to better manage change would benefit from a board with technology experience that can help ensure that technology investments are compatible across various business units.”

From a geographic perspective, the report found that the boards of banks in the UK Finland, Ireland and the US have a higher percentages of directors with professional technology experience compared to those in other countries, such as Brazil, China, Russia, Austria and Italy.

“While it’s not practical for banks to make a rash number of tech-savvy board appointments to fill the gap in technology credentials, they should consider technology expertise as a factor for new appointments, alongside their other evaluation criteria,” Macchi says. “There are also other, more immediate ways to increase technology expertise among board members — for example, coach members on the latest developments on key technologies such as cloud, artificial intelligence and the internet of things to better understand how the combination of technology and human ingenuity unlocks value. Boards can also tap into the expertise of third-party suppliers and make time to specifically discuss the technology strategy during board meetings to get the most out of their investments.”

Comments: (5)

Andrew Smith
Andrew Smith - RTGS & ClearBank - London 15 March, 2021, 11:541 like 1 like

This is not a surprise at all. I am shocked though that it is believed that "coaching" boards members to help provide them with technology experitse is a real option. Unfortuntately many of these concepts such as cloud, AI and IoT need more than a "skim" read of detail to understand and therefore make decisions about. Just because you are aware of these technologies and some of the use cases, it doesnt mean you are able to understand the ramifications / opportunities that these technologies provide. This is primarily because you dont fully understand them but also that lack of understanding makes it increasingly hard to see the application within your own business and therefore the potential they have. 

Not surprised though that its suggessted that banks rely on independent third parties. This is something many boards depend upon due to the lack of the right skills at that level. 

Philippe Guenet
Philippe Guenet - Henko - Reigate 16 March, 2021, 06:221 like 1 like I don’t think it is just the tech expertise, it is the strategic context of the value chains and the plays they can make between the platform of the banks and the multiple ways of intermediating the value chains. A board member does not need to know how you do containers on Cloud. But they need to refresh their understanding of how you do Strategy / Org Design / Leadership in fast evolving Digital landscape. Tools and strategic school from the 60s don’t cut it anymore. The drama is that when we talk digital transformation, all that is mentioned is delivering technology. It is also and predominantly a different way of organising, leading, strategising, collaborating. That, they need to update selves with.
Andrew Smith
Andrew Smith - RTGS & ClearBank - London 16 March, 2021, 08:43Be the first to give this comment the thumbs up 0 likes

Philippe you're totally right, that agile culture needs to make its way into the boardroom, and I think that is only possible in many circumstances by brining in new blood.

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 16 March, 2021, 15:27Be the first to give this comment the thumbs up 0 likes

Did the Accenture report cited in this article actually use the word "donkeys"?

Philippe Guenet
Philippe Guenet - Henko - Reigate 16 March, 2021, 16:02Be the first to give this comment the thumbs up 0 likes

Hi Andrew - I don't think that Agile is the unique answer. It is much broader than the scope that Agile has covered so far. I tend to talk about digital leadership instead so it opens wider possibilities. I wrote such article on Planet Lean explaining how to bring strategy in digital change and creating situational awarness using maps https://planet-lean.com/strategy-lean-digital-transformation/

I am working on a whitepaper for banking too.