Bank Director’s 2022 Technology Survey, sponsored by CDW, delved into the technology concerns and challenges bank senior executives and board members face, and where they’ve been investing their resources.

And survey results showed that competitive pressures continue to alter the landscape for financial institutions.

Bank Director reported 81% of survey respondents say their bank increased its technology budget for 2022, reporting a median increase of 11% compared to 2021.

Still, banks acknowledged that leveraging technology to create a more competitive and efficient organization requires internal know-how, and almost half of responding directors and executives worry that their bank lacks an adequate understanding of emerging technologies.

Further, Bank Director discovered 45% say their bank relies on outdated technology.

“Almost half of the respondents point to big and superregional banks as significant threats — and that doesn’t account for companies like PayPal, Chime and others that are nipping at banks’ business,” said Emily McCormick, vice president of research at Bank Director.

“Bank Director’s 2022 Compensation Survey, conducted earlier this year, found technology talent to be in high demand. I believe we can see a direct connection between a need for in-house expertise and the industry’s ability to meet today’s challenges,” McCormick continued in a news release.

The 2022 Technology Survey indicated that most banks employ high-level executives focused on technology, particularly in the form of a chief information security officer (44%), chief technology officer (43%) and/or chief information officer (42%).

However, Bank Director pointed out that few institutions have a chief data officer or data scientists on staff — despite almost half of survey participants expressing concerns that the bank doesn’t effectively use or aggregate the bank’s data.

Bank Director highlighted six other key findings

—The competitive landscape: 56% of all respondents view local banks and credit unions as their top competitive threat, followed by big and superregional banks at 46%. One-third worry about competition from big tech companies such as Apple, while an equal number are concerned about competition from digital, nonbank business lenders.

—Hit-or-miss on digital applications: Nearly half of respondents say their bank has a fully digital process for opening retail deposit accounts, with larger shares representing banks over $1 billion reporting as much. Far fewer respondents report a fully digital process for retail loans, small business deposits or loans, or commercial loans.

—Generational divides: Just 25% of the directors and executives surveyed say their bank has the tools it needs to effectively serve Generation Z, and half believe their institution can effectively serve millennials. Eighty-five percent say as much about Generation X, and 93% say this of baby boomers.

—All-In on the cloud: 85% say their bank uses cloud technology to generate efficiencies internally; 66% use application programming interfaces (APIs), which allow different applications or systems to exchange data. Robotic process automation (32%) and artificial intelligence or machine learning (19%) are far less commonly used.

—New frontiers: Three-quarters say their board or leadership team has discussed risks or opportunities related to cryptocurrency or digital assets in the past 18 months. Sixty-four percent say the same of banking as a service (BaaS), and 69% say that of environmental, social and governance issues. Cannabis, on the minds of 58%, was more commonly discussed at banks under $5 billion of assets.

—Views on collaboration: More than half of respondents view technology companies as vendors only, as opposed to collaborating with or investing in these firms. Thirty-nine percent, primarily representing banks over $1 billion in assets, say their institution has collaborated with technology providers on specific solutions. Twenty percent have participated in a venture fund that invests in technology companies, and 11% have directly invested in one or more of these companies.

Bank Director noted the survey includes the views of 138 independent directors, chief executives, chief operating officers and senior technology executives of U.S. banks below $100 billion in assets.

Full survey results can be found via this website.