In banking, are senior managers expected to be IT literate?

I came across this blog post, which says that senior directors would not know about IT. I quote:

• Yet I wonder how often the SOA deployment of modules for new core banking services is actually discussed in a main Board agenda?
• How often do the guys sit and actually ask about their Internet banking platform and whether it's fit for mobile access?
• Do they really get to grips with the idea of the CEO doing a daily podcast update for investors and employees that can be downloaded internally and externally?
  I doubt it very much.

I agree that getting IT up to a Bank Board level is perhaps asking too much. But do we really want a Bank Board member to talk about IT down to the level of an SOA, Internet Banking Platform or Mobile Access, SOA, or what have you?

I am afraid not. Having had the dubious pleasure of seeing some board minutes and having some friends who work in strategy consulting, your normal board minutes are generally on strategy aspects, PE Ratio's, M&A, investments and disinvestments, risk, legal cases, regulatory pressures, and the like (the normal business of the firm). Operations, IT, finance, property, etc., the means to the business are only discussed if things go pear shaped. If the board of directors of any bank start to talk about SOA, I am going to be extremely worried (why are they wasting time talking about SOA?)

Now on the other hand, the business heads of the product areas are definitely technology literate. More often than not, every head of trading, product or region usually has his CIO / Head of Technology fully aligned (directly or via the COO) to him. I have yet to come across a head of technology who is not ferociously technology literate. When your second cost line item is technology, you have to be extra-ordinarily lucky to get away without paying attention to it.

I also disagree to a certain degree about knowledge of IT. At the end of the day, we are doing an intermediary role. IT is the mechanics of the intermediation. At the senior levels, you need to have an appreciation of what technology can do and learn to know that technology is an enabler, but for a Board Director to know deep about SOA? very doubtful indeed. See here for my previous post.

As for the future of the CIO? well, that's for another post! :)

 

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