Tue. May 28th, 2024

TLDR

Nearly 92% of banks plan to either maintain or increase their investment in technology in 2024, according to a survey from Dragonfly Financial Technologies. The survey, titled “State of Banking,” found that bank executives are optimistic about the industry, with 85% expressing a positive outlook for 2024. However, there are concerns over legacy technology and tech debt, with 53% of executives expressing worry about their current reliance on outdated systems. Some key areas of investment for banks include real-time payments, FinTech applications, and API banking adoption. The survey also revealed that 84% of banking executives polled said their banks are already operating in the cloud.

 

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Nearly 92% of banks plan to either maintain or increase their investment in technology in 2024, according to a survey from Dragonfly Financial Technologies. The survey, titled “State of Banking,” gathered insights from over 100 bank executives on their biggest challenges, spending initiatives, and technology preferences for the coming year.

The survey found that bank executives are optimistic about the industry, with 85% expressing a positive outlook for 2024. This optimism is reflected in their plans for technology investment, with 51% of respondents expecting to increase their tech spend and 41% planning to maintain current levels of investment. Less than 8% of executives expect to decrease their tech spend.

However, the survey also revealed concerns over legacy technology and tech debt. More than 53% of banking executives expressed worry about their current dependency on outdated systems, and over half (51%) said legacy technology/tech debt is standing in the way of their bank’s success.

Bank executives cited a number of key concerns for 2024. The majority (65%) are most concerned about protecting and growing deposits, while 59% believe fraud will be a top concern. Additionally, 58% believe the biggest challenges to digital business banking success are staffing resources, while 46% cited feature function/competitive gaps and budget as sources of concern.

Despite these challenges, banks are planning to invest in new technologies to improve customer experiences and reduce technology debt. The survey found that real-time payments are a key area of investment, with 63% of executives stating they are likely to add services like the FedNow service to their payments’ portfolio. Additionally, 67% of executives are open to introducing FinTech applications, such as NetSuite and QuickBooks, to customers. API banking adoption is also a priority, with 57% of executives believing it will provide impactful applications and connections.

The survey also addressed banks’ use of cloud technology. The results showed that 84% of banking executives polled said their banks are already operating in the cloud, and of those not yet operating in the cloud (16%), 44% said their banks are planning a move to the cloud. However, banks are still hesitant to fully embrace a cloud-based model, with only 8% of banks running more than 75% of operations in the cloud.

As banks increase their investment in technology, the focus will be on adding quality services that their business customers want. One way to achieve this is through composable embedded banking solutions, which allow banks to gradually add services and improve overall feature functionality.

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