2024 Technology Survey: Envisioning Your Bank’s Future

*This article has been updated from an earlier version to correct several data points.

In Capital One Financial Corp.’s 2024 annual report, CEO and Chairman Richard Fairbank reminded shareholders of the tech-forward company’s origins as a credit card bank centered around data, analytics and statistical modeling. “We were a technology company that does banking,” he wrote, “competing against banks that use technology, but it is not who they are.”

For most banks, technology is not a core part of their identity but a means to achieve efficiencies or better serve their customers. Few bank leaders identify their banks as innovators, according to the senior technology executives, CEOs and directors participating in Bank Director’s 2024 Technology Survey, sponsored by Jack Henry & Associates. But as community banks increasingly rely on data analytics to improve back-office productivity and manage regulatory compliance duties, respondents point to several key gaps in their strategies around data, artificial intelligence and technology more generally.

As bank technology budgets continue to climb, the survey indicates that more banks could quantify the impact of those investments: Just 21% of respondents say their bank measures its return on investment for technology projects.

“What’s not measured can’t be managed,” says Jennifer Geis, fintech innovation strategist with Jack Henry. “While a majority of banks say technology is a strategic priority, few measure ROI for technology projects. This disconnect may be the result of many bank boards not making technology a regular topic of discussion and strategy.”

Banks have a wealth of financial information about their customers at their fingertips, but they don’t necessarily understand their full financial lives: 38% believe their bank has access to at least half of their customers’ financial data, while 39% estimate it’s somewhere in the range of a quarter to half. Lee Wetherington, senior director of corporate strategy at Jack Henry, believes that around 25% is a reasonable estimate for most banks. Banks could tap into more of their customers’ data through the use of open banking, which uses application programming interfaces to provide third-party access to financial data.

For banks, Wetherington says open banking can provide the additional data required for big-picture goals, including organic growth, fraud prevention and efficiency improvements. “All banks need more data to better fight fraud and improve personal service at scale.” he says. “Open banking provides that additional data.”

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 main 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 13% 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.

Fraud Concerns
A majority (89%) say they are more concerned about fraud in their bank’s digital channels compared to last year. Check fraud (80%), phishing scams or socially engineering attacks (53%), and digital payments fraud (48%) are the top three types of fraud that worry respondents most.

Tech Budgets Increase
Seventy-five percent say their bank’s technology budget rose in fiscal year 2024, at a median 4% increase. A median 10% of that budget was devoted to new initiatives, according to respondents.

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.

To view the high-level findings, click here.

Bank Services members can access a deeper exploration of the survey results. Members can click below to view the complete results, broken out by asset category and other relevant attributes. To find out how your bank can gain access to this exclusive report, contact [email protected].