2017 Technology Survey: Data Deficiencies

Despite working in an industry flooded with customer data, just 13 percent of the senior executives and independent directors responding to Bank Director’s 2017 Technology Survey believe that their financial institution effectively uses data to serve the needs of existing customers or identify new customers. Yet, 65 percent indicate that data analytics will impact their financial institution over the next five years.

Sponsored by technology solutions provider CDW, the 2017 Technology Survey was conducted in June and July of 2017 and surveyed 145 chief information officers, chief technology officers, chief executives, independent directors and chairmen of U.S. banks above $250 million in assets. Chief operating officers, chief financial officers, chief marketing officers and other senior executives also responded.

Forty percent say their bank dedicates staff exclusively to data analytics, either by hiring new employees (20 percent) or shifting current staff to focus on the issue (20 percent). Forty-four percent, all at banks below $5 billion in assets, indicate that current staff focuses on data in addition to other duties at the bank. Ten percent rely on consultants and outside providers.

Despite increased technology budgets—53 percent report that their bank’s technology budget increased between 5 and 10 percent for fiscal year 2017, and 21 percent report an increase of 15 percent or more—61 percent of responding executives say that data analytics doesn’t represent a sufficient portion of the bank’s technology budget. Twenty-one percent say the bank hasn’t designated any money for data analytics.

Additional Findings:

• Sixty-two percent of respondents describe their banks as “fast followers” rather than early adopters when it comes to how they approach technology.
• Forty-five percent indicate that their institution’s management team and board are open to working with newer fintech startup firms to help the bank implement new products and services or create efficiencies within the organization. However, 46 percent say bank leaders haven’t even considered working with startups.
• Seventy-seven percent are confident that the staff and board of the bank would be prepared to react if the institution itself experienced a cyberattack or data breach.
• Forty-four percent believe that the bank would be vulnerable if one of the bank’s vendors experienced a cyberattack or data breach. Just 21 percent believe the bank would not be at risk in such an event.
• Forty-seven percent indicate that the board discusses technology at every board meeting, with 94 percent indicating cybersecurity is a current focus in the boardroom. Fifty-five percent say the board also focuses on improving processes in the bank through the use of technology.
• Fifty-six percent say the board does not have a sufficient level of expertise regarding technology.
• To better educate the board about technology in the past year, 52 percent say the board has brought in relevant bank staff, and 47 percent indicate that a management-level technology committee regularly presents to the board.
• Eighty-nine percent of bank directors and chairmen say they primarily rely on bank IT staff to stay informed of technology trends related to the banking industry.

To view the full results to the survey, click here.