For all the discussion about IT's role in enabling banks' business strategies, finding references to this contribution in financial statements is usually a futile endeavor. This has been particularly notable in recent days as banks have released their fourth quarter 2010 financial reports. There's been lots of mostly encouraging financial news, but not much in the way of attributing any of that improvement to the efforts of the IT organization.
One exception is Memphis-based First Horizon National Corp. , which announced its results today (Friday, Jan. 21). Amid information about capital raising and TARP shares, CEO Bryan Jordan offered the following observations about 2010 achievements and priorities for 2011:
"We are excited about our progress in 2010. We reached a number of milestones, and we see momentum building as we enter 2011. We returned to profitability. We retired TARP while keeping our capital position strong. We significantly improved credit quality. We invested in technology that will improve the experience of our customers and employees as well as improve productivity and efficiency.
"Our priorities for 2011 include growing our business by developing and deepening relationships with our customers, improving our efficiency ratio, effectively deploying capital, continuing to improve credit quality and focusing on the future by remaining nimble and fast in making decisions and responding to our customers' needs and changes in the market."
It's heartening to hear a bank CEO go on the record and attribute success at least in part to an increased investment in technology. It would be great if this attitude became more widespread, but I suspect that at the end of the day senior management still tends to view IT either as a cost to be managed, or as a means strictly to reduce costs and headcount. A Wall Street Journal article that also appeared to day summarized a number of financial services firms' plans to cut costs, mainly by cutting jobs. The WSJ article reports that Wells Fargo, American Express, Synovus Financial and State Street Corp. all have announced plans to reduce headcount as a means of reducing expenses. Despite the beginnings of economic recovery, according to the article:
"Some analysts think revenue growth rates may never return to pre-crisis levels. That means bankers will have to focus on cost cutting more seriously than they have in the past."
Wait a minute, isn't that what CIOs and other senior executives have been concentrating on for the past few years? It makes me wonder if, after all this time, senior management at many institutions really understands what the IT organization does and can do.