I spent time this week at the Bank Systems & Technology Summit with 50+ banking CIOs and IT executives in beautiful San Diego, Calif., at the Grand Del Mar Resort. It’s a smart group of executives – including the Bank Systems & Tech Elite 8 that honors the top business technology executives in banking - that had a sense of optimism, and also a full plate of challenges. I tried to absorb all I could and learn from many conversations during the Summit. This was a great conference and one where execs were discussing deep issues. So here goes...

• IT budgets will increase in 2011 for most banks; however, the biggest increase -- and some of the existing budget  -- will be applied to dealing with regulation and compliance, starting with Frank-Dodd legislation in the U.S. Most risk and legal departments within the banks are still sizing up the 2,300-page piece of legislation, and I heard many times: “We don’t know what we don’t know.”  Most executives expect even more legislation based on the Obama administration’s effort to clamp down on the financial industry.

• At times, I felt like I was at a marketing conference – three consistent themes were Mobile Banking, Social Media and Customer Analytics. It is amazing how much conversation these topics are generating with bank IT executives. The banks, and all financial sectors, are balancing legal and risk implications with the desire to engage customers and consumers. This further underlines how much the CIO and CMO are working together more and more, and how pervasive social media has become at work and in our personal lives.

• There was a major double-down on “consumer experience” and building all processes around the customer. My roundtable breakout emphasized introducing change to better serve the customer and give them a new way to do business. Many expect to see the mash-up of customer data and processes. 

• Cloud computing & the banking industry: There is a definitive “no-way attitude” when it comes to the public cloud and many forms of software-as-a-service. Unequivocally, all apps will stay behind the firewall and within the data center (aka, private clouds).  Any form of SaaS must be behind the firewall until security risks are mastered. Not sure this will be any time soon. 

• Also on the Cloud theme, the CTO of Citi commented on how ironic it was that many vendors are suddenly calling themselves “cloud computing” companies (or at least positioning this way). He felt this is a mistake by vendors and a “detriment” to the companies/tech providers as most banks do not view cloud as a strategic technology yet. Cloud can be very effective, but it’s not the end game.

• Kathy Burger, Editor-in-Chief of Bank Systems & Technology, commenting on the state of banking and IT: “The tone and language is much more focused on driving growth and moving forward.”  There clearly was positive news, wrapped in a blanket of risk management and compliance and governance with pending legislation.

Share your best practices for engaging the banking community!

Scott Vaughan is Chief Marketing Officer of UBM TechWeb.