Less than 6% of boardroom members of the world’s largest banks have professional technology experience, research from Accenture shows. Of the more than 100 banks surveyed across the globe, 43% of boards had no member with professional technology experience, while 13% had more than two. The survey further highlights that only 11% of banks have technology committees at board level, suggesting the potential threat from disruptive technologies may not be fully grasped by the board.
In a report from Accenture, titled ‘Bridging the Technology Gap in Financial Services Boardrooms’, the consulting firm explores the level of technical experience directors of the largest global banks possess. The analysis involved 1,925 executive and non-executive directors working across 68 banks in Europe, 20 banks in the Asia Pacific regions, 18 banks in North America and 3 banks in South America. For a director to be classed as having ‘professional technology experience’ they must have served in a position that had senior technology responsibilities, for instance as a chief information officer, chief technology officer or chief digital officer, or have had senior responsibility at a technology firm.
The survey finds that the overlarge part of bank directs have had no professional technology experience; only 6% of board members and 3% of CEOs at the world’s largest banks have had such experience. For many banks (43%) no board member has professional technology experience, at 30% one person has such experience, while 13% have more than two members with such experience.
This poses a problem for banks, according to Richard Lumb, Group Chief Executive of Financial Services at Accenture, because “many of the biggest challenges now confronting banking are intimately connected with technology so directors need a robust understanding of technology if they are to make informed decisions.” The issues facing banks include FinTech, cyber-security, IT resilience and technology implications of regulatory changes. According to Lumb, the rapidly changing environment from disruptive technology and regulatory requirements means that technologies “have all become critical board-level issues but many bank boards simply don’t have adequate expertise to assess these issues and make decisions about strategy, investment and how best to allocate technology resources.”
Not every region has the same level of technology expertise at board level. Particularly the US and UK have higher levels of board level representation, at 15.7% and 14.3% respectively. Australia, Japan, Germany and Switzerland all sit slightly above or slightly below the 7% range. Particularly low levels of professional technology experience are on bank boards in Belgium and China. However, none of the banks in Brazil, Greece, Italy and Russia had any professional technology experience on their board.
The report further finds that 11% of the more than 100 banks surveyed have set up a committee whose function it is to deal with technology related issues. According to Lumb this number suggests that many banks are not yet waking up to the full consequences that technology may have on the historic dominance many of the institutions have enjoyed. He remarks that, “they also need a clear innovation agenda with measurable objectives, investment plans and execution strategy. Board members have a key role to play in helping set the trajectory and monitor progress, but to do so, they will need to fill the current technology expertise gap in boardrooms.”