Former Google Software Engineer or
Although it is not mandatory for executives to include their names on their resumes,
What it means to be “tech-savvy” is up for debate. But bankers and industry experts agree that at least two members with a strong technical background are important, and training beyond the balance sheet is also important. Establishing a technology-specific subcommittee can also raise the profile of this area within your financial institution.
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“As a former chief information officer for a $3 billion community bank, I absolutely recognized the need for technology-savvy individuals on the board,” Breeden said.
At the same time, it is difficult to find people capable of carrying out the task.
“This is no longer a ceremonial position,” said Brad Scovill, president and CEO of $2.5 billion C&N Bank in Wellsboro, Pennsylvania. “Businesses have become more complex over the past 20 to 30 years.”
What does a tech-savvy board look like?
The Massachusetts Institute of Technology research resonated with Satish Muthukrishnan, chief information, data and digital officer at Ally Financial.
Detroit-based Ally has several members on its board, including a vice president at Google, a former chief information officer at Bank of America, and a former CEO of vacation rental website HomeAway. are connected.
In Breeden's experience, large banks have at least one director who comes from a technology or software company and at least one person who has led major innovation, transformation, or modernization projects at the financial institution or another technology-dependent company. There will be a name. Data, analytics, or AI as a differentiator.
“Not everyone brings in executives from Silicon Valley,” Breeden said. “We have a huge pool of tech-savvy talent who have worked in technology-oriented roles in industry and financial services.”
Such is the case with Citizens Bank of Edmond in Edmond, Oklahoma. Its board of directors is made up of representatives from the healthcare, journalism, construction and architecture industries. While their jobs may not be directly related to banking, “we've had to adapt to stay relevant,” he said.
Some banks are going a step further and creating a dedicated technology committee within their board of directors.
At the $186 billion Ally in 2020, Muthukrishnan led the board's technology committee with then-CEO Jeffrey Brown to focus on technology investments and consider cybersecurity concerns. and assessed how banks are providing digital capabilities to their customers. This replaced the previous Digital Transformation Committee. Muthukrishan and his team present their strategy to the board at five board meetings each year.
“This has sparked more conversations with the board,” he said. “We have received tremendous support for our technology roadmap and investments.”
Main Street Bank, located in Fairfax, Virginia, is much smaller than Ally, with $2 billion in assets. But the company created a technology committee in 2011 around the same time it hired Terry Sager, a director with a background in telecommunications, to join its banking and holding company board.
The committee currently consists of four independent directors and two internal directors. The most recent addition is Ali Manoucheri, CEO of Metrostar Systems, which provides digital information technology services to the public sector, who joined in February.
“When Terry took over in 2011, it was very intentional, and when Ali took over just recently, it was very intentional,” said Jeff Dick, the bank's chairman and CEO. It was,” he said.
MainStreet, which has six branches, has relied on remote services for its customers for years.A few years ago, the company
“We've always differentiated ourselves through technology,” Dick said. The technical committee said: “We have carried out cyber testing, penetration testing, etc. to ensure that data is adequately protected and to give confidence that we are doing everything we need to do as a board. We've always monitored what we're doing.'' It's a small company. ”
Dick was once an inspector with the Office of the Comptroller of the Currency.
“We recognize that it is important that the board considers risk management and considers it appropriate,” he said. “I would be more concerned about moving forward with a technology project if the director wasn’t looking at it from the right perspective.”
how to make it happen
If a member leaves or retires, or the organization merges, the time is ripe for a board refresh.
“At the community bank level, boards don't change very often,” said Jason Henricks, founder and CEO of the community bank consortium Alloy Labs Alliance.
When hiring new directors, banks need to be clear about the problem they want to solve and the kind of people who can help them solve it.
“You have to be grounded in your why,” Breeden says. For example, does the bank feel that technology is essential to competing with other companies and that it needs a board member to drive that vision?
“In some cases, we're looking for people who have been on the ground in terms of large-scale technology modernization and have done that. In other cases, we're looking for people who have been on the ground in terms of large-scale technology modernization, and we're also looking at opportunities outside of financial services to help us achieve more. We're also looking for people who can bring a 'disruptive lens to the role of technology in banking,''' Breeden said. “Both archetypes are valid, depending on where the bank is located.”
During his tenure, Mr. Castilla hired three board members, including the health care system's CEO and Oklahoma State's former chief financial officer.
“What I liked was that when I was talking to them about the board, they asked me, is the technology in the bank good enough? What are the plans for the future?” she said. “It was a clear priority for them that the boards and banks they wanted to join were evolving.”
Carey Ransom, managing director of BankTech Ventures, a venture capital fund with banks as limited partners, questions how well board members understand modern technology architectures, such as the cloud, and how familiar they are with the world of data. We recommend that you evaluate your familiarity.
“It's not about whether you understand AI today, but how it's evolving,” he said.
But finding someone with the right background to balance board duties with a full-time job can be a challenge.
“Technology-savvy people are being proactive in their careers, and being on a bank board is no longer an easy job,” said C&N, as the local hospital system's CIO resigns at 3 p.m. said Scoville, who experienced this. Due to time constraints, it will take several years. “With the speed at which technology is advancing, finding people who are in the game and understand current technology and how it applies to our business is a skill set these days.”
Henricks advocates for banks to invest in board training that goes beyond the balance sheet and goes deep into strategy.
Tech-savvy boards are “reallocating resources in real time, and they don't see it as a failure in the process, it's a sign of a learning organization,” he said. “This requires a deeper strategic understanding than a balanced budget with constant spending throughout the year.”
Citizens Bank of Edmond's board of directors, including Castile, annually attends a bank director training program through the Southwest Banking Graduate School at Southern Methodist University's Cox School of Business. Board members also regularly participate in that program's Certified Community Bank Director Program.
Castile conducts strategic planning sessions in conjunction with its annual training program.
“I don't think I would have thought that if I hadn't had this training. [the board] He will also be well-equipped to ask difficult questions of management,” Castilla said.
