The Governance of Strategy and Strategic Technology Risks

Patrick McConnell

This chapter considers the governance of financial technology (fintech) strategies in financial institutions and, in particular, the role of the board in managing the many risks that arise from technology strategies. The chapter first discusses how financial institutions are adept at employing information-technology innovations and then considers a number of fundamental technology inventions that have changed the ways that IT is being used in the financial industry. A number of new fintech innovations have changed the balance of power between financial institutions and their customers, which will require institutions to change their business models. One of the most important changes will be for the board to consider IT no longer merely as a cost of doing business but as an opportunity to provide new types of services for its customers. Finally, the chapter discusses the challenges that face the boards of financial institutions, and their regulators, in embedding new technologies into their corporate strategies and managing the strategic risks that arise.

FINANCIAL INSTITUTIONS AND TECHNOLOGY INNOVATION

Financial institutions, especially large international banks, are usually

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