Posted by Bangalore: Bank boardrooms continued to lack technology expertise and digital fluency. Only 10% of board members at top banks have professional technology experience. This is contrary to the significant increase in the adoption of digital technologies over the past few years.
Only 10% of board directors at leading banks have professional technology experience. One-third of bank boardrooms’ members have no technology experience, revealed a new report from Accenture
“Boosting the Boardroom’s Technology Expertise – Focus on Banking,” – the report based on the analysis of directors’ professional backgrounds. The report analyzed nearly 2,000 directors of more than 100 of the world’s largest banks by assets.
Banks are ramping up their technology investments to meet the changing consumer demands such as digital interaction and remote working. But their boards of directors are lacking technology expertise to counter the risks and gain benefits of their technology investments.
“Much of the disruption brought about by the pandemic has led to a rapid shift within banking to more digital touchpoints, requiring speedy technology investments,” said Mauro Macchi, who leads Accenture Strategy & Consulting in Europe.
“Banks that are accelerating their cloud adoption to better manage change, would benefit from a board with technology experience. It can help ensure that technology investments are compatible across various business units,” added Macchi.
As per the report, Accenture recommends that 25% of banks’ board directors should have technology experience. While the world’s largest banks have made progress on adding technology experience in the boardroom but progress has been slow.
However, in terms of technology experience, Accenture defines it as executives holding or having held senior technology positions at a company or senior responsibilities at a technology firm.
For instance, only 10% of all board directors and CEOs on the boards have professional technology experience. The increase in professional technology experience for board directors and CEOs is just 4 and 6 percentage points, respectively in five years.
In addition, the number of banks whose board has at least one member with professional technology experience has increased only 10 percentage points from 57% to 67% in the past five years. That means one-third of banks still have no board members with professional technology experience.
On a positive note, while only 19% of the directors with technology experience five years ago were women, that figure has increased to 33% today.
The report found that the boards of banks in the U.K., Finland, Ireland and the U.S. have higher percentages of directors with professional technology experience. Compared to those in other countries, with sizeable increases compared with the 2015 findings.
Brazil, China, Russia and various countries across Europe, including Austria and Italy still have a very low percentage of banks’ boards of directors with technology experience
For bank boardrooms, it’s not practical to make a rash number of tech-savvy board appointments to fill the gap in technology credentials. “But they should consider technology expertise as a factor for new appointments, alongside their other evaluation criteria,” said Macchi.
Besides appointments, there are also other but more immediate ways to increase technology expertise among board members, according to Macchi.
For example, coach members on the latest developments on key technologies. Such as cloud, artificial intelligence and the internet of things (IoT) to better understand how the combination of technology and human ingenuity unlocks value.
“Boards can also tap into the expertise of third-party suppliers and make time to specifically discuss the technology strategy during board meetings to get the most out of their investments,” concluded Macchi.