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Bridging the technology gap in the boardroom

Do financial services directors have the technology expertise needed?

Overview

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 signaled 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.

DOWNLOAD BRIDGING THE TECHNOLOGY GAP IN FINANCIAL SERVICES BOARDROOMS [PDF]

"Technology competence at board level will soon become indispensable for financial institutions."

URS ROHNER

Chairman of the Board of Directors, Credit Suisse

Key Findings

Accenture research, analyzing professional technology experience in boardrooms of more than 100 of the largest banks around the world, shows that:

  • Only 6 percent of board members have professional technology backgrounds.

  • Only 3 percent of these banks have CEOs with professional technology backgrounds.

  • Forty-three percent of the banks analyzed don’t have any board members with professional technology backgrounds.

  • Thirty percent of these banks have only one board member with a professional technology background.

  • In North American banks, 12.1 percent of board members have professional technology experience, compared with 5.1 percent in European banks and 5 percent in Asian banks.

  • Though boards of banks in the US and the UK have higher percentages of directors with professional technology experience than others, the numbers are still low—at 16 percent in the US and 14 percent in the UK.

  • Less than 1 percent of directors at Chinese banks—and none at Brazilian, Greek, Italian and Russian banks—have professional technology experience.

Recommendations

A fundamental change in boardroom culture is the call of the hour.

Putting technology on the boardroom agenda:
What is required is a combination of technology expertise with deep knowledge and insight into the impact of technology on financial services among members of the board.

Providing technology coaching for boards:
They need to be in a position to evaluate and decide upon strategies and investments where digital technology is central; decide on major technology investments; judge technology risk and report regularly to shareholders on everything from cyber threats to the risk of technology obsolescence.

Forming technology committees as a new norm:
These committees should report to and advise the board just like audit and risk committees. They should include independent technology experts to help boards oversee regulatory compliance and monitor progress. Only 11 percent of the leading banks currently have these technology committees in place.

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Authors

Richard Lumb

Group Chief Executive – Accenture Financial Services

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Mauro Macchi

Senior Managing Director – Accenture Strategy, Banking

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Juan Pedro Moreno

Senior Managing Director – Accenture Iberia


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