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Bank Director magazine has released the results of its latest technology-focused survey of banking industry senior executives. The findings, to a certain extent, fly in the face of prevailing wisdom that says brick-and-mortar bank branches are a thing of the past.
Of the more than 160 U.S. executives surveyed, more than half — 54% — say their bank will build more branches. The majority of those respondents, though, say new branches will be smaller than current branches. Only 1% of respondents say they’ll build more branches that will be bigger than their current offices. Nearly one in 10, 9% say their strategy involves branch closures.
At the same time, in looking for more ways to connect with customers, only 1% of executives surveyed say their banks don’t have a mobile app for retail banking. Somewhat surprisingly — or perhaps not in these times of cybersecurity fears — 20% say their banks do not use cloud computing services.
Somewhat unsurprisingly, on the other hand, credit unions (i.e. a banker's bogeyman) are viewed as the biggest competitive threat to banks, with 22% of respondents being of that opinion.
Banks overwhelmingly view cybersecurity as the biggest technological issue, which leads to one of the survey’s most startling findings: Almost eight of 10, 79%, of respondents say their boards need to enhance their level of expertise regarding cybersecurity and how to tie technology to bank strategy. That’s especially true for banks with less than $500 million in total assets, according to the survey.
“General technology trends” and “understanding how the bank should invest in technology,” for example, were high on the list of issues boards should have more knowledge of. That could be a lingering, and dangerous, issue.
“Technology and strategy are inextricably linked in today’s evolving digital economy,” writes Emily McCormick, Bank Director magazine’s director of research, in the report. “Unfortunately, bank boards — tasked with the oversight of the bank, including its long-term performance in a changing competitive environment — continue to struggle to wrap their hands around technological change and its implications.”
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