Temenos and Celent: American Banks Face Growing Fight for the 'Switchable Middle'

Temenos (TMSNY) and research firm Celent report that three-quarters of US banking customers form a “switchable middle” who are only moderately satisfied or less with their primary bank.

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Temenos (TMSNY) and research firm Celent report that three-quarters of US banking customers form a “switchable middle” who are only moderately satisfied or less with their primary bank.

The study, “The Banking Expectation Gap: US Consumer Edition,” finds rising difficulty for 62% of US banks in winning and retaining customers, driven by shortfalls in payments, fraud protection, and value for money. Nearly half of consumers are dissatisfied with payment services, 42% with security and fraud protection, and over one-third with fees, rates, and rewards. The report also highlights growing openness to AI-powered banking, tempered by privacy and accuracy concerns, and notes that 46% of banks see legacy technology as a barrier, with over 60% considering core system transformation.

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Three-quarters of consumers are only moderately satisfied or less with their primary financial institution

ORLANDO, Florida, USA, Sept. 02, 2026 (GLOBE NEWSWIRE) -- Temenos (SIX: TEMN), a global leader in banking technology, today announced new research with Celent highlighting a widening gap between what US banking customers increasingly expect and banks’ ability to deliver.

Published in “The Banking Expectation Gap: US Consumer Edition,” the findings identify a “switchable middle”: the 75% who are only “moderately satisfied” or less with their primary financial institution. At the same time, 62% of US banks say it has become more difficult to win and retain customers over the past 12 months.

According to Celent, banks must respond to a new era of customer engagement, shaped by AI, agentic capabilities, and rising expectations for faster, more advisory, and personalized services. At the same time, trust has a significant impact on a customer’s decision to stay or switch banks. Those banks constrained by legacy systems will find it harder to meet rising expectations for smarter, more responsive banking.

Key findings from the research show that:

Payments, Fraud Protection, Value, and Digital Emerge as Weak Spots

Customers are dissatisfied because banks are underperforming in several areas that matter directly to their everyday experience: payments, security and fraud protection, and value for money.

• Nearly half of consumers are dissatisfied with their payment services.
• 42% cite dissatisfaction with security and fraud protection.
• Over a third are “least satisfied” with value-based offerings (fees, rates, and rewards).

Capturing the Switchable Middle 

Consumers are willing to consider switching banks when competitors offer clearer financial value and stronger digital capabilities. Four out of the top six switch drivers are related to value or trust.

• 51% would consider switching for better rates and fees on credit products.
• 42% say more personalized fee structure or rewards.
• 39% cite better online and mobile banking features as a reason to switch.

Michael Bernard, Principal Banking Analyst, Celent, said: “The switchable middle provides both a threat and an opportunity for banks. Consumer demand is shifting from access and convenience toward personalization, trust, and guidance. Banks that can combine modern digital experiences with relationship-aware personalization and credible human support will be best positioned to retain customers and win share from both traditional competitors and digital-only challengers.”

Brian DuVal, President, North America, Temenos, said: “The challenge for US banks isn’t a lack of ambition. It is whether their technology foundations can keep pace with rising customer expectations. Modernization should translate into faster innovation, greater product flexibility and trusted AI-enabled experiences. Technology change creates competitive advantage when customers can see and feel the difference.”

Other key insights from the report:

Harness AI While Building Trust

US consumers express rising enthusiasm for AI-driven improvements in specific banking features, such as financial wellness, but have realistic AI concerns and still want access to a person when the issue is complex, sensitive, or high stakes.

• 67% would use AI-powered conversational interfaces for everyday banking.
• 39% use or would “definitely use” AI-powered services to make authorized purchases on their behalf.
• 48% of customers are concerned about privacy and data security in AI-driven banking, while 34% worry about AI errors and inaccuracies.

Banks Face Core Modernization Challenges

Banks must focus on building the foundations for next-generation banking. A bank’s ability to align its “supply” with customer “demand” rests not only on the top of its technology stack but also its core foundation.

• A near majority of US banks (46%) acknowledge limitations in their current technology and legacy platform as a barrier to innovation and delivering enhancements to products and customer experiences.

• 30% of banks say that legacy systems are a constraint on deploying Generative AI.
• Over 60% are considering a transformation of their core banking systems with over one fifth (22%) saying it is in their top three investment priorities for 2026/27.

About the Research

Celent surveyed 2,500 US consumers aged 18–65+ in June, July, and August 2026. Total US respondents were 586 whose primary financial institutions were national banks (37%, community/local banks (30%), regional banks (19%) and digital only banks (14%). Additional insight is drawn from Celent’s Dimensions Survey of 433 global banking leaders, including 61 from North American institutions. Celent analysts also conducted in-depth 1:1 interviews with select banking leaders, concentrated among banks with US$10B–$500B in assets in the US.

To read the full report, The Banking Expectation Gap: US Consumer Edition please download it here: https://www.temenos.com/resource/the-banking-expectation-gap-us-edition/

About Celent

Celent is a research and advisory firm that helps financial institutions navigate business and technology transformation. We combine deep industry expertise, in-depth research, and practical consulting to support strategic decisions and drive innovation. With a global team of experienced analysts and a rich database of best practices and solutions, we deliver objective insights that help firms operate more effectively and stay ahead of change. Celent is part of GlobalData, the intelligence and productivity platform. For more information, please visit www.celent.com.  

About Temenos

Temenos (SIX: TEMN) is a global leader in banking technology. Through our market-leading core banking suite and best-in-class composable solutions, we are modernizing the banking industry. Banks of all sizes utilize our adaptable technology – on-premises, in the cloud, or as SaaS – to deliver next-generation services and AI-enhanced experiences that elevate banking for their customers. Our mission is to create a world where people can live their best financial lives.

For more information, please visit www.temenos.com.

Scott Rowe
Temenos
+  44 (0) 20 7423 3857
scott.rowe@temenos.com

FAQ

What did Temenos (TMSNY) and Celent reveal about US banking customers in 2026?

Temenos and Celent reported that about 75% of US consumers form a “switchable middle,” being only moderately satisfied or less with their primary bank. The research shows banks are struggling to meet expectations on payments, security, value, and modern digital and AI-enabled services.

What is the 'switchable middle' in the Temenos (TMSNY) and Celent US banking study?

The “switchable middle” describes the 75% of US banking customers who are only moderately satisfied or less with their main bank. These customers are more open to switching when they see better value, stronger digital capabilities, and higher perceived trust from competing institutions.

Which weaknesses did consumers highlight in US banks in the Temenos (TMSNY) research?

Consumers identified weak spots in payments, security, and value. Nearly half are dissatisfied with payment services, 42% with security and fraud protection, and over one-third are least satisfied with value-based offerings such as fees, rates, and rewards.

What factors would make customers switch banks according to the Temenos (TMSNY) and Celent report?

Customers would switch mainly for better financial value and digital services. Specifically, 51% would move for better rates and fees on credit products, 42% for more personalized fees or rewards, and 39% for better online and mobile banking features.

How do US consumers view AI in banking in the Temenos (TMSNY) study?

US consumers show interest in AI for everyday banking: 67% would use AI-powered conversational interfaces and 39% use or would definitely use AI for authorized purchases. However, 48% are concerned about privacy and data security, and 34% worry about AI errors and inaccuracies.

What technology challenges do US banks report in the Temenos (TMSNY) and Celent findings?

A near majority of US banks, 46%, acknowledge their current technology and legacy platforms limit innovation and product enhancements. Additionally, 30% say legacy systems constrain Generative AI deployment, and over 60% are considering core banking transformation, with 22% ranking it among top investment priorities for 2026/27.