Banks are not technology companies (yet)

Banks are not technology companies (yet)

Chris Skinner

Chairman at The Financial Services Club

Views 533

Banks are not technology companies (yet)

22.03.2016 11:30 am

I’ve been illustrating my frustration with incumbent banks for some time, saying that they lack technology leadership.  Almost a third of my new book talks about the biggest challenge for banks to respond to Fintech, Big Data, Cloud, Blockchain and all those other issues is to have leadership.  Digital transformation is not a project run by a function, but a complete change of the bank.  You cannot change the bank without strong leadership and most are failing.  In fact, the only bank that’s really out there is BBVA, because their leader is a programmer by background.  Even they have problems though with cross-functional structures and a channel-based view of the market.

Why is this a problem?

It is a problem because how can you change the bank to be digital if (a) the leadership doesn’t understand technology and what digital means; and (b) if no one on the Executive team has any experience of technology.

Banks are run by financiers, not technologists. I highlighted this point a while ago, and was delighted to recently pick up this report from Accenture, published at the start of the year.

Accenture analysed the background of 1,925 executive and non-executive directors of 109 of the largest banks by assets in the world, to find out if they had any background in technology.  This meant finding board members who had previously had senior technology responsibilities, such as serving as a Chief Information Officer, Chief Technology Officer or Chief Digital Officer.

Guess what they found?

Only 3% of CEOs of leading banks have professional technology experience;

Only 6% of board directors have professional technology experience;

40% of banks have no board members with any professional technology experience in their career.

Banking is a technology business.  What are you thinking?

Dumb and dumber

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