MONETT, MO (May 1, 2025) |
Banks and credit unions are prioritizing operational efficiency while focusing on growing deposits and loans, according to Jack Henry's seventh annual Strategy Benchmark.
The survey of 149 C-level executives at financial institutions using Jack Henry™ products and services highlights the critical issues and opportunities facing the industry.
"As growing non-interest expense and loan-loss provisions put downward pressure on net income in 2024, community banks and credit unions entered 2025 with growing urgency around efficiency," said Lee Wetherington, Senior Director of Jack Henry Corporate Strategy. "Given data is key to both efficiency and growth, leading institutions must strategically leverage data they have — and aggressively aggregate data they don't have — to drive more with less and create new value where it matters most."
Most of the banks and credit unions surveyed (76%) plan to increase their investments in technology over the next two years, with a third of respondents projecting a 6% to 10% increase in tech spend.
"Financial institutions are favoring technology solutions that can help them affordably and effectively enhance digital services, combat fraud, and automate their back office," said Jennifer Geis, Senior Analyst of Jack Henry Corporate Strategy.
Key Findings from the 2025 Strategy Benchmark:
- Top Priorities
- Banks: Growing deposits, increasing operational efficiency, and growing loans are top strategic priorities for banks.
- Credit Unions: Increasing operational efficiency, growing loans, and acquiring accountholders are highest on the list for credit unions.
- Leading Concerns
- Banks: Net interest margin compression, fraud losses, and acquiring/retaining talent are the biggest concerns for banks.
- Credit Unions: Fraud losses, acquiring younger accountholders, and cyberattacks are most concerning to credit unions.
- Technology Investments
- Digital Banking and Cybersecurity: Both banks and credit unions plan to invest in digital banking, fraud prevention, and automation to enhance the user experience and guard against rising cyber threats like phishing attacks, ransomware, and other malware.
- Artificial Intelligence (AI): Credit unions continue to invest heavily in AI, while banks' investments in AI increased significantly over last year.
- Small Businesses
- 80% of banks and credit unions plan to expand services for small businesses over the next two years, up from 78% in 2024 and 65% in 2023.
- Top planned services: payments, digital service tools, and credit/lending.
- Payments
- 89% of financial institutions plan to add new payment services over the next two years, with FedNow® being the top priority for both banks and credit unions.
- Digital card issuance, same-day ACH, and contactless cards round out the top payment priorities.
The study's results are based on an online survey conducted in January and February 2025 of a diverse sample of Jack Henry clients with assets ranging from less than $500 million to more than $5 billion. Download the eBook to learn more.