The secret to a technology-driven future might be a legacy committee from the last century.
IT steering committees, which include C-suite executives and a mix of back-office and front-office personnel, have existed since the 1990s when bank regulators mandated them. But banks and credit unions can breathe new energy into these committees and leverage them to oversee the technology decisions that will fuel future growth, says Beth Johnson, a technology consulting principal with RSM US who has more than 20 years of experience in IT consulting, in a conversation with Banking & Fintech Editor Kiah Lau Haslett for Reinventing Banking.
The steering committee is important. She says technology budgets can be the second-highest noninterest expense for banks, after human resources, adding that these committees can help institutions promote “a culture of continuous improvement” at their organizations. She advises executives who sit on these committees to make sure their discussions aren’t solely about “keeping the lights on.” Effective committees help banks stay accountable for their spending and strike a balance between the technology that supports daily operations and the tech furthering growth or efficiency initiatives. Refreshing the committee with new members can reenergize it.
“As your culture changes and evolves, and maybe your markets and your customers change, make sure you’re looking at your committee to do the same thing,” she says. “It’s not something that’s meant to be stagnant, and sometimes, I’m telling you, it does get that way.”
Accountability is an important job of the steering committee. Johnson says this includes using business cases to make decisions, defining and calculating an institution’s annual technology spending, and tracking the return on investment. It also includes making sure the institution is using its tech to its fullest potential. She says most organizations use only about 40% of the functions and capabilities of any existing technology they have.
“One of the things we’re not great about … is using what we’ve got, she says. “[W]e’ve got a lot of technology that we’ve already invested in.”
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