Survey: IT officers say core processors slow to respond to innovations

The majority of banks' top technology officers say slow internal processors make it difficult to keep up with new innovations in the marketplace.
The majority of banks' top technology officers say slow internal processors make it difficult to keep up with new innovations in the marketplace.

BRENTWOOD, Tenn. – The majority of banks’ top technology officers say slow internal processors make it difficult to keep up with new innovations in the marketplace.
Indeed, 81 percent of bank chief information officers and chief technology officers responding to Bank Director’s 2016 Technology Survey said their core processors are slow to respond to new innovations. The lag makes it “difficult to keep up with shifting consumer expectations regarding technology,” according to a press release.
Bank Director, a Tennessee-based data and information company for the financial services industry, surveyed 199 board members and senior executives of U.S. banks with between $250 million and $20 billion in assets in June and July.
The survey examines how well the industry is responding to such technology trends as analytics and blockchain, along with its overall attitude toward core providers and financial technologies companies.
Banks are highly reliant on bank’s core providers to support services beyond core processing, such as mobile banking and bill pay. Thirty-percent of respondents said they had to pull back on plans to integrate a more innovative product, service or delivery channel due to the inability or unwillingness of the bank’s core processor to support that activity, according to the survey.
Other key findings include:

  • Thirty-one percent of respondents have converted their bank’s core technology within the past five years. Forty-two percent converted their core more than 10 years ago.
  • Respondents report their bank works with a median of five technology firms, including the core provider.
  • Sixty-one percent of participants see fintech firms as both competitors and partners.
  • Online marketplace lenders should be more heavily regulated, say 60 percent of respondents. Forty-one percent worry that they’ll lose loans to these lenders, but 18 percent don’t think these lenders have long-term viability.
  • Opinions are mixed on the impact that blockchain – the underlying technology behind the digital currency bitcoin – will have on the banking industry. Twenty-four percent believe it will impact all banks. However, 57 percent don’t understand blockchain enough to form an opinion, or have never heard of the technology.
  • Cybersecurity looms large: Having a strong technology infrastructure in place to protect against cyberattacks remains the top technology concern for survey participants, at 72 percent.
  • Seventy percent indicate that their bank could better use data to serve the needs of existing customers or identify new customers.
  • Seventy percent of respondents believe that technological innovation is a priority for their board, but less than half discuss technology at every board meeting.
  • Thirty-four percent of respondents describe themselves as early adopters of technology.
  • The full survey can be found here.

    No posts to display