Overseeing strategy is one of the main responsibilities of the board of directors, and new technologies are now at the heart of banks’ strategies. Boards therefore need deep insight into technology in order to set strategies. But in most bank boardrooms, technology expertise is still lagging.
Why boards should be on top of the technology issue:
Technology innovations—such as mobile applications, big data and cloud computing—require massive IT investment and changes to existing systems.
Complying with new regulations—whether around ring-fencing or money laundering—invariably requires extensive reprogramming or changes to IT systems.
Antiquated “core banking” systems that are inflexible and ill-suited to heavy demands of digital banking make the IT challenge for banks all the more acute.
Regulators have signalled concerns about the industry’s ability to handle technological challenges. The capacity of financial institutions to manage their existing IT infrastructure, cope with the changes taking place and address growing cybersecurity risks is being closely scrutinized by regulators.