Bank Director 2020 Tech Survey: Banks Are Addressing the Tech Gap Now

Sal Trifilio

Sal Trifilio

October 01, 2020

Since 1991
Bank Director has been a go-to source of information on the banking industry by providing content that focuses “on the strategic issues most fundamental to a bank’s CEO, senior leadership team, chairman, and independent directors."

As a part of this effort, Bank Director conducts an annual technology survey that examines how senior leaders at financial institutions are thinking about strategy, budgets, demand, investments, and more. They combine traditional surveying techniques with live interviews to get a complete understanding of the story the data is telling them.

On Tuesday, Sep. 29, we invited Bank Director VP of Research Emily McCormick to talk about the unique nature of this year’s survey, which was conducted in June and July at the height of the Paycheck Protection Program.

During our 30-min insights session, Emily gave a detailed look at the trends, attitudes, and strategies driving tech adoption in banking today. Here are some of the most important stats and takeaways discussed during our conversation.

Objectives Haven’t Changed, But Timelines Have

“We have been looking into the objectives that drive technology investment and I think it's important to note that those objectives have not changed pre-pandemic and post-pandemic,” Emily told us. However, “what was once a three year objective, [banks] want to get this done a lot more quickly … knowing that maybe you can't wait anymore on [closing tech gaps] and re-prioritizing [their] investments with that in mind.”

Some of the top stats underlying this takeaway include:

  • 81% of banks are focused on using technology to improve the customer experience
  • 79% of banks are focused on using technology to create a more efficient operation
  • 39% of banks are focused on using technology to improve online and mobile offerings
  • 31% of banks are focused on using on building and implementing more innovative solutions
  • 27% of banks are focused on leveraging data for customer and strategic insights

Major Shift In Attitude Makes Digital Most Important Channel to Growth

“So last year, 38 percent told us that the digital channel was most critical to growth … that bumped up significantly this year to 50 percent pointing to the digital channel as most critical to growth,” Emily said. “You don't tend to see these big leaps in sentiment. You might see a point here, a point there, but that's a 12-point leap in pointing to digital as being critical to growth; your most important delivery channel.”

Some other important stats that point to the pre-eminence of digital moving forward:

  • 97% of banks reported an increase in adoption of digital channels by customers
  • 50% of banks say customers prefer to use digital channels rather than traditional ones

COVID-19 Has Further Increased the Acceleration of Digital Adoption in Banking

According to Emily, when the survey was conducted in June and July more than half of respondents said they were making adjustments to their technology roadmaps in response to COVID-19. However, given the timing of when the survey was conducted, she said she feels confident that the number would increase if it were asked again today.

“There is some concern that banks may pull back on spending given the challenges and the environment, and the pressures on profitability,” Emily said. “But, based on this survey, that's, that's not what I would expect to see. I think we can continue to see [tech spending] increase, just because it has been trending up.”

The survey results underscoring this takeaway include:

  • 64% of banks increased spending on technology in response to COVID-19
  • 70% of banks adopted technology specifically for the Paycheck Protection Program
  • Technology spending at banks has consistently increased, year-over year, with the average budget jumping from $750,000 to $900,000 heading into 2020
  • After spending in response to COVID, two-thirds of respondents said their technology spend went beyond their expected budget for 2020

Final Takeaway: Now Is the Time for Financial Institutions to Address Technology Gaps

As we wrapped our discussion with Emily we asked if there was one overarching takeaway attendees needed to bring back to their senior leadership teams. Noting that “the environment is probably only going to get more competitive” as we head into the new year, Emily underlined the need for banks and credit unions to identify and close technology gaps, saying “ultimately, that’s where a lot of the technology investment is going.”

The stats and takeaways above, while important, only highlight a portion of our conversation with Emily on Bank Director’s 2020 Technology Survey. To get her full analysis, watch the on-demand webinar above, or read their report here.

For more content like this, register for one of our upcoming Insights Sessions.

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