Bank Director's 2024 Technology Survey Examines Technology Plans at U.S. Banks

Rhea-AI Summary

Bank Director's 2024 Technology Survey reveals key insights into U.S. banks' technology strategies and concerns. The survey, sponsored by Jack Henry, highlights that improving operational efficiency (49%), attracting and retaining customers (29%), and growing low-cost deposits (10%) are banks' primary technology objectives.

Notable findings include:

• 75% of respondents report increased technology budgets for fiscal year 2024
• 53% invested in payments, 46% in digital retail account opening
• 80% are discussing budgets for data analytics, 66% for artificial intelligence
• 60% experienced delays in technology project completion
• Only 21% measure ROI for technology projects

The survey also notes a shift in competitive landscape, with increased concern about retailers like Amazon and Walmart. Banks are increasingly hiring developers, and boards are prioritizing technology expertise.

Bank Director's 2024 Technology Survey highlights the state of technology adoption and concerns among U.S. bank leaders.

NASHVILLE, Tenn., Sept. 10, 2024 /PRNewswire/ -- Bank Director, the leading information resource for directors and officers of financial institutions nationwide, released the results of its 2024 Technology Survey, sponsored by financial technology provider Jack Henry. The findings reveal how today's bank leaders think about strategy, resources, emerging technologies and fraud. 

Banks increasingly rely on data analytics to improve back-office productivity and manage regulatory compliance duties. According to the survey, improving operational efficiency (49%), attracting and retaining customers (29%), and growing low cost deposits (10%) are identified as banks' primary technology objectives.

"Given today's revenue challenges and elevated labor costs, it's little surprise to see efficiency as a key driver behind bank investments in technology," says Emily McCormick, Bank Director's vice president of editorial and research. "However, just 21% of senior technology executives, CEOs and board members say they measure return on investment for their technology projects — indicating it could be difficult to know whether they've attained those strategic goals."

Three-quarters of respondents report increased technology budgets for fiscal year 2024. Over the past 18 months, bank leaders say their organization has invested in payments (53%), digital retail account opening (46%), digital business account opening (37%) and data analysis (32%).

While most banks are actively discussing budgets for data analytics (80%) and artificial intelligence (66%), few realize they have only a fraction of their customers' financial data on hand.

"Due to financial fragmentation, banks must embrace open banking to access a comprehensive view of an account holder's data necessary to feed algorithms and tune foundational AI models," says Greg Adelson, President and CEO of Jack Henry. "Without broad customer data, banks can't identify small business owners from retail accounts, enhance personal service at scale, and deliver personalized product and service recommendations."

The survey includes the views of 111 independent directors, chief executives, chief operating officers and senior technology executives of U.S. banks below $100 billion in assets. Full survey results are now available online at BankDirector.com.

Additional Key Findings

A Shifting View of Competition
Compared to prior surveys, respondents still identify local banks and credit unions (52%) and big or superregional banks (49%) as their primary competitive threats, along with neobanks that compete for consumer deposits (43%). However, bank leaders report increased concern about the competitive threat posed by retailers such as Amazon and Walmart, with 12% citing them as a competitive threat compared to 5% a year earlier.

Delayed Projects
Sixty percent say one or more technology projects weren't completed on schedule over the prior 18 months, and 36% say they experienced issues integrating the new technology into existing systems. Just 21% say they had no issues with planned technology projects.

Hiring: Developers
Just a quarter of respondents say their bank employs developers or programmers, double the percentage who said as much a year ago. Banks over $1 billion in assets are more likely to make these hires.

Board Priorities
Sixty-one percent say that leveraging technology is a strategic priority for the board. Half of respondents say their board has a technology expert. Of those without a technology expert, 29% say their board is seeking to add one.

About Bank Director
Bank Director reaches the leaders of the institutions that comprise America's banking industry. Since 1991, Bank Director has provided board-level research, peer-insights and in-depth executive and board services. Built for banks, Bank Director extends into and beyond the boardroom by providing timely and relevant information through Bank Director magazine, board training services and the financial industry's premier event, Acquire or Be Acquired. For more information, please visit BankDirector.com.

About Jack Henry & Associates, Inc.^® 
Jack Henry^™ (Nasdaq: JKHY) is a well-rounded financial technology company that strengthens connections between financial institutions and the people and businesses they serve. We are an S&P 500 company that prioritizes openness, collaboration, and user centricity – offering banks and credit unions a vibrant ecosystem of internally developed modern capabilities as well as the ability to integrate with leading fintechs. For more than 48 years, Jack Henry has provided technology solutions to enable clients to innovate faster, strategically differentiate, and successfully compete while serving the evolving needs of their account holders. We empower approximately 7,500 clients with people-inspired innovation, personal service, and insight-driven solutions that help reduce the barriers to financial health. Additional information is available at www.jackhenry.com.

For more information, please contact Bank Director's Director of Marketing, Deahna Welcher, at dwelcher@bankdirector.com.

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SOURCE Bank Director

FAQ

What are the primary technology objectives for banks according to the 2024 Technology Survey?

According to Bank Director's 2024 Technology Survey, the primary technology objectives for banks are improving operational efficiency (49%), attracting and retaining customers (29%), and growing low-cost deposits (10%).

How many banks reported increased technology budgets for fiscal year 2024?

Three-quarters (75%) of respondents reported increased technology budgets for fiscal year 2024.

What percentage of banks are discussing budgets for data analytics and artificial intelligence?

The survey found that 80% of banks are actively discussing budgets for data analytics, while 66% are discussing budgets for artificial intelligence.

What percentage of banks experienced delays in technology project completion?

According to the survey, 60% of respondents said one or more technology projects weren't completed on schedule over the prior 18 months.

How has the perception of competitive threats changed for banks?

While local banks, credit unions, and big banks remain primary competitive threats, the survey noted increased concern about retailers like Amazon and Walmart, with 12% citing them as a competitive threat compared to 5% a year earlier.