Managing Technology in a Community Bank

The author is senior vice-president at River Oaks Bank, a $430 million-assets commercial bank based in Houston. The article is adapted from a speech given at a recent ABA conference. During the next decade, Community banks will have at their disposal more technology than ever before. With networks of powerful personal computers, powerful midrange systems boasting enormous data storage capacity, and integrated software that provides enhanced customer and management information, community banks will have ample opportunity to use automation to improve customer service. When compared to large banking organizations, community banks generally face three disadvantages in managing technology. First, they have a limited number of staff and front line employees, which makes it difficult, if not impossible, to dedicate personnel to technology projects on a full time basis. Some community banks don't have any programmers, though they may have one or two people who know something about personal computers. Second, their employees often lack the technical knowledge and skills necessary to evaluate and implement new technology. Third, community banks don't have the capital to invest in projects that are based on emerging technology. The types of projects they undertake have to be fully operational and functional from day one. However, community banks do have certain advantages that many of their larger counterparts lack. For one thing, they have a better understanding of their customers' needs, wants, and expectations. Senior and middle managers usually have a better understanding of the internal workings of their own organizations. Most importantly, community banks have a much shorter time horizon-they can make decisions and plans and implement solutions with greater speed than larger banks. Do the right thing. Where does effective technology management start in a community bank? It starts with the CEO, who, in a well-managed, technology-oriented bank, is someone interested in seeing technology used to support strategic efforts and business plans. The CEO doesn't have to be a technology guru, but does have to understand technology's importance to business. The CEO sets the tone for managing technology within the organization by supporting automation projects, influencing hiring practices, and holding people accountable. The community bank also needs a central person responsible for managing technology. There should be a senior operations officer or chief information officer, someone at the senior management level who is responsible for managing technology throughout the organization and for working in partnership with other senior executives to formulate strategic plans, set priorities, and identify opportunities and problems. Technology needs to be managed on a day-to-day basis. There are several ways to do this. In our bank, we chose to establish a committee that is responsible for technology and automation. This committee is made up of mid-level managers and our senior operations officer. The committee members are not expected to be technology experts, but they are interested in learning how technology can be used to make their departments more productive. The committee members are actively involved in setting technology standards for the bank, whether the standards deal with the type of personal computers purchased or the type of software used. They're involved in tracking and evaluating new technology, setting automation priorities for their areas, and exchanging ideas with their counterparts. Another option for community banks would be to form a task force to a study a specific automation, productivity, or customer service issue or problem. …