2026 Technology Survey: Banks Feel Heat From Growing Field of Competitors

Community bank leaders no longer view national and superregional banks as their biggest threats.

Bank Director’s 2026 Technology Survey, sponsored by Jack Henry & Associates, finds that 58% of bank executives and directors cite financial technology firms such as Block and PayPal Holdings as one of their greatest competitive threats, second only to local banks and credit unions (61%) and outpacing big or superregional banks (48%). Forty percent share concerns about competition from deposit-focused neobanks such as Chime. This is the first time that bank executives and board members responding to the annual survey have pointed to fintechs that offer a range of products — not big national banks like JPMorgan Chase & Co. or Bank of America Corp. — as their greatest threats.

That shift in sentiment may reflect the regulatory and political landscape in Washington, which has recently favored greater competition in the financial system. More fintech firms have sought bank charters over the past year — PayPal and the buy now pay later lender Affirm Holdings, for example, applied for industrial loan charters in 2025. In its application, PayPal outlined its ambitions to expand its offerings to small business clients.

In addition to the ILC applicants, more than a dozen firms have applied for national trust bank charters with the Office of the Comptroller of the Currency, according to S&P Global Market Intelligence. These include the cryptocurrency firms Circle Internet Group and Coinbase Global.

In the survey, 16% point to cryptocurrency or stablecoin platforms as a top competitive threat. The Genius Act, signed into law in July 2025, laid out a framework for banks and licensed nonbanks to issue payment stablecoins — digital assets backed by currency or U.S. Treasuries. While federal agencies have begun to issue proposed rules implementing the law, many community banks may not yet have a clear use case or customer demand. Perhaps as a result, just 10% say their institution has a strategy for stablecoin. Fewer (7%) have a strategy for tokenized deposits, another form of digital assets that can stay on bank balance sheets as deposits.

While banks await those final stablecoin rules, “institutions must ensure their core infrastructure… can support the tokenized money use cases that gain traction and scale in the years ahead,” says Lee Wetherington, senior director of corporate strategy with Jack Henry.

Of potentially greater concern than stablecoin, however, is the 70% of survey respondents who say their bank does not have a strategy to reach younger accountholders, says Jennifer Geis, senior strategic advisor for research and payments with Jack Henry. “Banks are finally recognizing the fintech threat,” she says. “Yet, they’re ignoring the very demographic that fintechs have targeted.”

Efficiency Over Growth
Seventy-six percent of bank executives and directors say they see technology as primarily an engine for improving efficiency, while just 24% view it as a means of generating growth.

Getting Educated On Artificial Intelligence
More respondents say their bank has been taking steps in response to the growing prevalence of AI-enabled technologies. For example, 88% say their bank has drafted an acceptable use policy and 74% are educating employees about AI-enabled fraud, up from 66% and 54% last year.

Gauging AI Usage
Seventy-two percent say their bank has implemented generative AI, which uses machine learning to create new content. Most report its use in operations, marketing and compliance. Thirty percent say they are using agentic AI, a newer form of AI that can autonomously carry out tasks. Almost a quarter say their bank is not using either form of AI.

Integration Challenges
Sixty-nine percent cite integrating new technology with existing systems as a top concern when it comes to their own bank’s use of technology, an 18-percentage point increase over the past year. Among banks that had a technology project fall short of its intended objectives, more than half pointed to integration as the culprit, which could indicate fragmented or outdated systems.

Prioritizing Payments
Eighty-two percent say their bank offers person-to-person payments to retail customers, a 9-percentage point increase from a year ago. Meanwhile, 58% offer mobile payment acceptance and 49% offer real-time payments to small and midsized business clients, up more than 10 percentage points over the previous survey.

Most Not Sold on Crypto
Majorities believe that cryptocurrency (79%) and stablecoin (63%) have been overhyped in terms of their impact on the banking industry, and 43% say the same of tokenized deposits. By contrast, just 15% believe that generative AI is overhyped.

To view the high-level findings, click here.

Bank Services members can click below to access 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].