Pub. 14 2017 Issue 3

O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G N E W M E X I C O R E A L I Z E D R E A M S 18 Banking on Technology By Glenn Martin, Regional Director, Promontory Interfinancial Network • Current Priorities. When asked what area of technology they are allocating the most budgetary resources to, banks ranked infor- mation security (36%) and online/ mobile banking (36%) as the two top priorities by a wide margin. Data management/data mining and regulatory technology lagged behind. At the bottom of the list were fraud detection (5%), market- ing/customer outreach (4%), and automatic underwriting/online lending (3%). • Investing Ahead. Given the growing threat of hackers and concern about online security and privacy, it’s not surprising that banks are shifting their technol- ogy investments to some degree. When askedwhether they expected their investment in technology to A s a f i nt e ch f i rm, we a r e a lway s i nt e r e s t ed i n what t e chno l og i e s banks are inves t ing in. Recent ly, we sur veyed f inancial inst itut ions about where they allocate budgetary resources for technology. Below we share some of the key findings. change over the next two years, banks listed fraud detection (78%) and information security (77%) as their top priorities for significant or moderate increases in funding. The listing of fraud detection as a major target for investment going forward signals an important shift for some banks from their current spending patterns. Interestingly, amajority of respondents (56%) indicated they plan onmaintaining current spending levels for automated underwriting/online lending. • Artificial Intelligence. In the banking sector, the movement toward using AI has been rather slow compared to other industries. Yet, according to our data, the pace of adoption may be quickening. Fifty-four percent of respondents stated that they expect to see AI systems become a familiar part of American banking in less than five years. About 10 percent think it will happen in two years or less. Breaking the numbers down by asset size, larger banks believe AI will be integrated into the banking sector sooner than smaller-sized institutions. However, approxi- mately 50% of community banks believe the integration of AI at their institutions will happen in five years or less. We hope you find this information help - ful. For more details, view the full Bank Executive Business Outlook Survey report at www.promnetwork.com/business-out- look-survey. n About Promontory Interfinancial Network Chosen by more than 3,000 financial institutions nationwide, Promontory Interfinancial Network is the leading provider of FDIC-insured deposit placement services. Banks can use the company’s solutions—Insured Cash Sweep, or ICS; CDARS; Promnet Repo; IND; Yankee Sweep; Bank Assetpoint; and Residential Mortgage Network— to build multi-million-dollar relationships, reduce collateral requirements, purchase funding, manage liquidity, and buy or sell loans. Visit promnetwork. com to find out how Promontory Network can help your bank to manage its balance sheet more profitably. ©2017 Promontory Interfinancial Network, LLC