Community bankers are spending more than ever on technology, according to survey published Wednesday, and their biggest concerns are data security and compliance.

Though they acknowledge the importance of those tasks, the bankers also said they are keeping them from doing what they really want to do: Improve customer service through offerings such as mobile banking.

"We've always had to protect our assets. That used to be just cash," said John Buhrmaster, the president of First National Bank of Scotia, a $302 million-asset unit of Glenville Bank Holding Co. Inc. in Scotia, N.Y. "Having our customers' information stolen would be far worse than losing the cash in the vault."

Cary Whaley, the associate director of payments policy at the Independent Community Bankers of America, the survey's sponsor, said 81% of participants cited risk management as their top priority.

The survey, conducted by mail in June, found that 73% have continuous security monitoring of their data systems, but only 20% do the work in-house.

Also, 64% of community bankers said they are using third-party providers to warn of security vulnerabilities. That figure never topped 40% in past surveys.

Of the 1,280 community bankers responding to this year's survey, 48% said their technology budget is bigger than it was last year. More than half the participants said between 5% and 14% of their total noninterest spending is in this area.

The last time the ICBA conducted such a survey in 2006, 54% of respondents said their technology budget had grown.

The percentage of bankers reporting flat or shrinking technology budgets has consistently declined since the Washington trade group began conducting its surveys in 2003.

In this year's survey, 57% said they will spend more on data security in the next two years, and 54% said they would spend more on compliance.

Not all bankers were happy that budgets are going up in those two areas.

"A lot of the things we do are strictly to meet regulatory requirements," said Sam Vallandingham, a vice president and the chief information officer at First State Bank, a $180 million asset unit of First Bankshares Inc. of Barboursville, W.Va. "It leaves very little discretionary budget to do things we would like."

He cited First State's planned replacement of its virtual private network, a security system that allows employees to access the bank's systems remotely.

Examiners found that the VPN was at the end of its life, Mr. Vallandingham said during a conference call. "We're still getting patches for it. They don't care."

When survey participants were asked where they planned to increase technology spending in the next two years, mobile banking was the most popular choice, ahead of merchant capture of check images, the ICBA said, without reporting any numerical percentages.

"People really like to have the freedom and accessibility for what their mobile device provides them," Mr. Vallandingham said. "This is going to be the payment mechanism of choice."

Mr. Buhrmaster predicted that mobile banking would gain the same kind of popularity in the next few years that Internet banking has today.

The survey found that 89% of respondents have Web sites where customers can perform transactions. Mr. Whaley said the remaining 11% are mostly the smallest banks, those with less than $100 million of assets.

Two-thirds of the respondents offer online bill payment to retail customers, but only 20% did so for businesses.

Mr. Buhrmaster said some functions of the bank, such as assessing credit risk, are not necessarily well suited for technological fixes.

"Scoring models are unreliable when it comes to assessing the true character of a borrower," he said, but community bankers are becoming overly reliant on things such as credit scores. "They're losing touch with their borrowers."

The largest share of community bankers — 38% — said they connect to the Internet using high-capacity T-1 lines, compared with 30% who use digital subscriber lines. T-1 and DSL access each had 35% of the market in 2006.

Raj Patel, a partner at Plante & Moran PLLC of Southfield, Mich., the accounting and business advisory firm that compiled the survey results for the ICBA, said a shrinking number of community banks are maintaining their own technology infrastructures.

"Over the years we've seen banks move more toward outsourcing the data center," to companies like the big vendors of core banking systems, he said. "They're better at managing those risks than a community bank is."

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