Everything Is Technology
“We’re clearly a technology company,” Bank of America Corp. Chairman and CEO Brian Moynihan told Yahoo Finance last October. “We spend about $3.5 billion a year on new code implementation; new products and services are driven by technology.”
Moynihan may have a point about his bank: In our RankingBanking study published in December, we calculated that Bank of America spent almost $9 billion on technology in 2020, about 16% of the big bank’s noninterest expense.
Other banks certainly have technology top-of-mind. It’s a topic that we explore at every conference, in each issue of Bank Director magazine, regularly on BankDirector.com and in every survey we conduct — not just Bank Director’s annual Technology Survey.
Take our most recent survey, focused on bank M&A. Surely that doesn’t have a tech bent to it, right? Nope, we found prospective acquirers hungry for scale to enable investment in technology and other key areas. What about compensation and the industry’s need for talent? You’d think that would be a tech-free topic, right? You’d be wrong, given the demand for tech talent and the shift in the workplace to remote and hybrid schedules. Remote work has added to persistent anxiety about cybersecurity, a perennial top concern in our annual Risk Survey. And governance? Well, banks don’t just need tech expertise on staff — it’s a big gap in the boardroom, too.
“Technology continues to change the world of business including banking,” wrote one independent director responding to our 2022 Bank M&A Survey. “If banks don't move to the latest technologies, they will become extinct.”
It’s all technology.
Community bank tech budgets keep rising in response: More than three-quarters of executives and board members reported in our 2021 Technology Survey that their technology budgets increased last year, at a median of 10%. I wouldn’t be surprised to see similar findings for 2022. Yet, while technology may touch every facet of finance these days, I don’t think most banks will call themselves tech companies, or even should.
Rather, I think the best institutions will weather the acceleration in digital services by being tech-enabled: expanding their technological capabilities to move strategies forward and create new opportunities, all while ensuring the safety and soundness of their banks and playing a positive role in the lives of employees, customers and communities.
• Emily McCormick, vice president of research at Bank Director
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