Though investment technology drives bank performance, only one in four U.S. community banks has management committed to IT implementation.
A new report from Aite Group, LLC reveals that how a bank manages IT impacts its bottom-line results. Based on information gathered from a February 2009 survey of 743 community bank respondents, conducted by Aite Group with the assistance of the Independent Community Bankers of America (ICBA), the report evaluates the impact of three aspects of how banks manage IT.
According to the report, tolerance of IT risk, senior management support of IT, and coordination between IT and business functions are key drivers of bank performance. Aite Group has identified three segments of U.S. community banks, based on these key drivers, and refers to these segments as Black Belts, Blue Belts, and Green Belts. Black Belts, or banks with a tolerance for IT risk, strong management support for IT, and strong coordination between business and IT functions, have experienced superior retail and business customer growth in the past year compared to other banks. Nevertheless, executives are committed to IT at only about one in four U.S. community banks, and senior managers must be convinced of the need for IT as a business enabler on a case-by-case basis.
"A bank’s approach to key aspects of IT management not only drives its business performance, but predicts its IT priorities and spending intentions," says Ron Shevlin, senior analyst with Aite Group and co-author of this report. "IT vendors have an opportunity to differentiate themselves by how they help financial institutions manage IT. They should focus on how they can help their bank clients improve the coordination between IT and other business functions, and help garner stronger management support for IT."
This 23-page Impact Report contains 18 figures. Clients of Aite Group’s Retail Banking and Wholesale Banking services can download the report on the Aite Group web site.
