ABA Banking Journal Competitiveness Survey 2008 - (Page S8) Technology: Bits, Bytes, and Bob Exhibit 14 >Who is your bank’s chief source of technology expertise? Other 2.1% Correspondent bank 1.5% Banker’s bank 1.4% Shared IT expert 3.1% Bank’s BHC staff 3.5% W While this chart illustrates the general trend, by asset size a very different mix is seen, below. Bank’s IT staff 55.9% Vendors 12.3% Technology consultants 20.2% Under $500 million $501-$999 million $1 billion-up Exhibit 15 Exhibit 16 >How does your bank’s tech spending for 2007 compare to 2006? Lower 6.3% >How will 2008 tech spending compare to 2007? Higher 57.7% Higher 68.7% Same 25% Lower 11.7% Same 30.6% e all have it, or can buy it,” a community bank CEO recently commented, when speaking about the impact of technology on his part of the industry. He pointed out that the upside of technology, outsourced or home brewed, is that it has enabled community banks to maintain competitive par with many of the larger players. Nearly anything a big bank can do, technologically, a community bank can add to its arsenal in scaled-down form. But the downside was that anyone with cash could have it, taking away most long-term competitive staff for tech advantage. Yet, being expertise first or most efficient with a given technology still counts, if only for a time, so community banks that can get and stay a page or two ahead benefit. And doing so depends not on tech, but on tech people, in-house or outside. Indeed, in spite of the trend towards outsourcing recounted elsewhere in this report, the exhibits on this page demonstrate that having tech expertise under the bank’s own roof not only remains important, but actually increases with growth. Exhibit 14, top, shows that close to six in ten community banks continue to employ a full-time IT head. And, as the smaller pie charts in Exhibit 14 show, the larger the bank, the greater the reliance on bank IT staff for technology expertise. And that goes a long way to explaining the finding of Exhibit 18 (opposite, top right), that good IT officers rank just behind good business lenders as the secondhardest bank employees to find. Nerds (still) rule. still depend on in-house IT 55.9% S8 MARCH 2008/ABA BANKING JOURNAL Competitiveness Survey 2008
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