Only one in 10 board directors in the traditional banking sector have professional technology experience and one-third of big banks have no tech knowledge in the boardroom.
These findings, from Accenture research, reveal a worrying lack of expertise at a time when banks are investing heavily in tech to keep pace with current trends.
Financial services businesses are being transformed by the use of financial services technology, known as fintech. “Despite the significant increase in the adoption of digital technologies over the past few years, there is a continued lack of technology expertise and digital fluency in the boardrooms of the world’s largest banks,” said Accenture.
The research analysed the backgrounds of 2,000 directors at more than 100 of the world’s biggest banks. It found that directors “lack the technology expertise to minimise the risks and maximise the benefits of their technology investments”.
Mauro Macchi, head of Accenture’s strategy and consulting business in Europe, said the Covid-19 pandemic has accelerated digital transformation and banks risk making mistakes due to a lack of IT knowledge in the boardroom. “Banks that are accelerating their cloud adoption to better manage change would benefit from a board with technology experience that can help ensure that technology investments are compatible across various business units,” he said.
Accenture said it believes 25% of board directors at banks should have technology experience, and that progress has been made in adding tech skills to banks’ top table.
For example, two years ago, Santander recruited a chief platform officer directly from Google – Aiaz Kazi. And back in 2017, HSBC named former Google engineer Mark Warriner as its retail bank and wealth management CIO. Warriner joined HSBC retail from Google UK, where he worked for almost six years, reaching the role of director of engineering.
Read more about digital banking skills
- US bank JP Morgan Chase has recruited 400 staff in the UK to work for its UK digital bank, which will launch in the coming months.
- Nationwide Building Society has opened the application process for an apprenticeship programme that aims to educate 1,000 people in five years.
- The DBS Future Tech Academy will focus on training the bank’s technologists in three disciplines.
But progress has been slow, said Accenture, and the 10% of all board directors who possess tech experience represents an increase of only 4% from research done by Accenture five years ago.
Meanwhile, the number of banks that have no board members with tech experience has fallen to 33%, compared with 43% five years ago. The report also found that diversity is improving, with 33% of directors with tech experience being women, compared with 19% in the previous study.
Accenture found that banks in the UK, Finland, Ireland and the US had the highest proportion of tech skills in the boardroom. In the UK, 26% of board members at banks have tech skills now, compared with 14% in 2015. In Finland, 23% of bank board members have tech skills, compared to none in 2015.
Macchi added: “While it is not practical for banks to make a rash number of tech-savvy board appointments to fill the gap in technology credentials, they should consider technology expertise as a factor for new appointments, alongside their other evaluation criteria.”
He said there are more immediate ways to increase tech expertise among board members: “For example, coach members on the latest developments on key technologies such as cloud, artificial intelligence and the internet of things to better understand how the combination of technology and human ingenuity unlocks value.”
Directors can also tap the knowledge of suppliers, Macchi added.