KPMG’s latest community bank industry outlook survey was published in the middle of last year but I had a chance to review it over the holidays. It skews a little smaller than my client base but 1/3 of the respondents are over $10 billion so it’s got some relevance.

Unsurprisingly, most respondents projected a modest (< 5%) increase in overall IT spending or an outright decline over the next year. Mobile banking/payments and leveraging data were cited by 2/3 of the participants as the most important customer growth-focused projects.

The ability to leverage data more effectively to comply with regulatory requirements is identified as the most important IT-related project pertaining to infrastructure and compliance over the next year by 35 percent of the executives surveyed.

So, leveraging data was also cited in 1/3 of the responses for the most important regulatory/compliance projects yet only 13% of bankers felt like their organizations have a high analytics literacy.

What do you think the program is that comes up most frequently in technology roadmaps I’ve built for clients over the past few years? Analytics. In the lower end of the mid-sized space, banks tend to be dependent on what their core vendor provides in this area. This approach historically exposes a couple of issues:

  • Core vendor solutions aren’t adequate because their scope is limited (core account servicing-centricity, lack of behavioral/channel data, etc.)
  • Technology alone does nothing to address the organizational and governance issues around analytics (skill sets, data integrity, etc.)

It’s a tall order to build a foundation for analytics but indeed it has benefits in both customer growth/retention as well as compliance. Banks have to remember the organization side of the equation, though–the best technology is worthless without the right organization to provide support, ensure data quality, understand the data model and solution capabilities, and make it sing.

There are additional questions on mobile banking, social media utilization, and information security as well. The KPMG report is worth a look if you haven’t seen it already.