Banks must find the right ingredients to succeed

ACCORDING TO a recent TBR survey, North American banks are planning to invest some $74 billion in IT improvements in 2014. That’s two percent more than they look to spend this year.

My only surprise is that banks won’t be spending more. It isn’t news that technology drives banking, nor that the extent to which it does will only increase.

In an earlier post I alluded to Moore’s Law, which essentially states that technological speed and capability grow geometrically. Banks that think they can prosper by doing things the old way are setting themselves up for a rude awakening.

Part of said rude awakening involves facing the fact that, at the current rate of technological advancement, “the old way” doesn’t refer to “the way you did a few years ago.” It refers to “the way you’re doing things right now.”

Banks that understand that are preparing for tomorrow by investing, right now, in infrastructure, business applications, databases and middleware, systems management, business intelligence and analytics, productivity applications … and in relationships with outside, expert firms that keep up on the state of the art in a way that no bank of any size can possibly do on its own.

Whoa, wait. Outside expert firms?

Indeed. Smart banks know they can’t do everything themselves. Not even the ones big enough to support their own mega technological development department.

Speaking of which, stay tuned for a major announcement from yours truly …

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