Banks and credit unions struggle with an overload of technology projects

SCOTTSDALE: A new research report from management consulting firm Cornerstone Advisors finds that as banks and credit unions struggle with an overload of technology projects, the remedy is having more technology—not less technology.

The research titled, Technology Management Complexity: Drowning in a Sea of Technology Projects found that half of 252 surveyed senior executives at US-based financial institutions cite too many projects as a top technology concern for 2015.

According to the study FIs with high or moderate technology management complexity—defined as the degree to which management is challenged to make coordinated, interdependent technology decisions—plan to improve the utilization of 21 applications in 2015, in contrast to the eight to nine apps for FIs with low technology management complexity. In addition, FIs with high technology management complexity expect to add or replace more than eight apps and renegotiate five to six contracts in 2015, Cornerstone Advisor said in a press release.

Roughly eight of 10 FIs in the high complexity category will spend more on technology in 2015, the report said, with approximately one in four investing much more. This compares to 65 percent of moderate complexity FIs and barely half of FIs with low technology management complexity.

"These executives are battling less with the complexity of their technology architectures than they are with the complexity of managing all that technology," said Brad Smith, Managing Director, Technology Services, Cornerstone Advisors. "It's all the enhancements, additions, replacements and vendor contract negotiations that are making it harder each day for FI executives to deliver measureable business results from their technology investments."

"As the number of technology projects an FI is managing increases, the likelihood that these projects will fall short of achieving their intended business benefits also rises," said Ron Shevlin, Research Director, Cornerstone Advisors. "The best way for banks and credit unions to manage this ever-growing complexity is to improve their existing technology capabilities."