New research from the Scottsdale, Ariz.-based management consulting firm Cornerstone Advisors found that as banks and credit unions struggle with technology project overload, the remedy seems to point toward employing more technology, not less technology.
"Technology Management Complexity: Drowning in a Sea of Technology Projects" found that half of 252 surveyed senior executives at U.S.-based financial institutions cite "too many projects" as a top technology concern for 2015.
"These executives are battling less with the complexity of their technology architectures than they are with the complexity of managing all that technology," Brad Smith, managing director of technology services for Cornerstone Advisors, said. "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."
According to report findings, financial institutions with high or moderate "technology management complexity" – the degree to which management is challenged to make coordinated, interdependent technology decisions – plan to improve the utilization of 21 applications in 2015, significantly higher than the eight to nine apps financial institutions with low technology management complexity plan to improve. In addition, institutions with high technology management complexity expect to add or replace more than eight apps and renegotiate five to six contracts in 2015.
"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," Ron Shevlin, research director for Cornerstone Advisors, said. "The best way for banks and credit unions to manage this ever-growing complexity is to improve their existing technology capabilities."
Roughly eight out of 10 financial institutions in the high complexity category will spend more money on technology in 2015, the report stated, with approximately one in four investing a great deal more. This compares to 65% of institutions in the moderate complexity category and barely half of institutions in the low complexity category.
Other key report findings include the following:
- On average, financial institutions will improve the utilization of 17 apps, add or replace nearly five apps and renegotiate two to three contracts in 2015.
- Financial institutions' plans to improve, add/replace or renegotiate lending apps are not on par with their plans for other technologies.
- From 2014-2015, there was a double-digit percentage point increase in planned utilization improvements for 21 technologies.
The report also included recommendations aimed at helping financial institutions better manage technology complexity, projects and contract negotiations, as well as a scorecard institutions can use to assess their levels of technology management complexity.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Roy Urrico
Roy W. Urrico specializes in articles about financial technology and services for Credit Union Times, as well as ghostwriting, copywriting, and case studies. Also: writer/editor of a semi-annual newsletter for Association for Financial Technology since 1997 and history projects funded by the U.S Interior Department, National Park Service and Warren County (N.Y.).
