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.”