When the deal is completed, Eugene McQuade will head the company's technology operations. Supporting him will be two savvy technology executives, Joseph Smialowski, vice chairman of technology and operations at Fleet, and Tim Arnoult, head of technology and operations at Bank of America. The two are likely to act as co-CIOs, one for the consumer banking side and the other for wholesale and investment banking, Bradway says.
Beyond attaining a national banking operation, the merger illustrates the potential for using technology to deliver banking services The retail network, featuring nearly 6,000 branches and more than 16,500 ATMs, will easily be the largest in the nation.
The deal comes at a time of renewed vigor in IT investment by banks. According to a report released Monday by the American Bankers Association and TowerGroup, technology investments by U.S. banks are trending away from short-term cost reduction toward longer-range objectives. Investment in branch renewal remains strong, the report says, redeeming the faith banks placed in their bricks-and-mortar assets at the height of the dot-com boom. Among banks with assets greater than $20 billion, technology spending is projected to grow at a 4.5% clip in 2004, up from this year's 4.0% growth rate. Spending on business-process outsourcing is expected to grow 28% next year, while software spending is expected to grow 9.4%.
The highest IT priority is customer-relationship-management, according to the ABA/TowerGroup report. The top five technology infrastructure priorities are replacing communications networks, PC and server upgrades, mainframe upgrades, and operations center improvements. Virus protection and intrusion-detection software are also high on the hit parade.
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