In the early days of the ATM, Northtown Bank of Decatur, Ill., considered whether to install one of the newfangled cash machines. My granddad, a longtime board member, spoke against the proposal. He had grown up in a small Nebraska town during the Great Depression, and he reasoned that customers wanted to talk to their banker. That personal connection conveyed a sense of trust.

Years later, after Northtown got gobbled up a larger institution and the ATM became a fixture of modern life, my granddad always got laughs when he recounted this anecdote. The self-deprecating subtext: Can you believe how wrong I was?

Banks have long been trying to cope with change and, as my granddad's story illustrates, they have not always been ready to adapt. Today the technological challenges facing the industry are far larger than they were in the 1970s, and the need for tech expertise on bank boards is greater. Yet banks of all sizes are lagging.

A recent study by Accenture looked at 109 large banks globally and found that only 6% of their board members overall have professional technology experience. More than 40% of these banks did not have a single board member with a professional technology background.

The situation is even more worrisome at small banks, which may not be grappling with cutting-edge issues like digital currency, but still need to address major challenges like cybersecurity. "I see a very big problem in the community banking space," says Jack Vonder Heide, who consults for small banks on technology issues. "I'm going to call it a dire lack of expertise at the board level concerning all of the pertinent issues related to technology."

Banks of all sizes are being targeted by hackers, and employees are often reluctant to challenge the boss over lax practices. "There's a hierarchy where the boss is exempt from criticism," Vonder Heide says. "There needs to be a real culture change in terms of safeguarding this massive and growing amount of data that's stored in electronic form. And the board needs to set the direction for that awareness within the entire bank."

Many small banks have directors who are in their 70s and are not comfortable using a smartphone, Vonder Heide adds. "How in the world can they make an informed decision on the nuances of bank technology? They can't," he says. "If you have a candid conversation with board members, as I have dozens of times each year, they say, 'You know what? I am so uncomfortable with technology. And I realize that I'm personally liable if I screw up. But what can I do? I just hope that nothing goes wrong.'"

Some banks are taking steps to address the problem. Among them is Bank of Hawaii, which named Victor Nichols, a former chief executive of Experian North America, to its board in 2014.

Bank of Hawaii specifically sought out a director with tech expertise to prepare for the retirement of another board member with a deep understanding of technology. "It was a very conscious search for someone like myself," Nichols says.

The $15 billion-asset Honolulu company also implemented training for other board members who lack a strong tech background. Nichols says having a board that understands technology is particularly useful during presentations by bank employees. "We're able to call out areas where they may need assistance," Nichols says. "I think it makes a big difference."

In its recent report, Accenture recommended that banks provide regular technology coaching to their boards.

The firm also concluded that bank boards should form technology committees that consider questions like what the bank can learn from best practices in other industries. Only 11% of the large international banks that Accenture studied had set up those committees.

"The challenge is to bring about more fundamental change in boardroom culture by ensuring that the opportunities and risks posed by technology take a much higher priority on the boardroom agenda," the Accenture report says.

Banks that don't have tech-savvy boards risk running afoul of policymakers. On Dec. 17, Republican Sen. Susan Collins and Democratic Sen. Jack Reed introduced new legislation that would require all publicly traded companies to disclose in securities filings whether their boards have cybersecurity expertise.

Jean-Louis Bravard spent 18 years at JPMorgan Chase, including stints in high-level technology roles, and he recently wrote an article for Harvard Business Review titled "All Boards Need a Technology Expert."

"I find very few people in my age group who really understand the importance of data," says Bravard, who is an adviser to several tech ventures. "I meet with senior bankers and people on boards, and they are still living in 1995."