We interviewed more than 100 banking executives to gain insight into their banks’ biggest challenges, spending plans and technology preferences for 2024.
According to the State of Banking survey, bank executives are overwhelmingly optimistic about the banking industry, with 85% citing a positive outlook for 2024.
With renewed optimism, 51% of respondents expect banks to increase or keep technology spending flat (41%). Less than 8% expect to reduce technology spending in 2024.
The survey also found some serious headwinds, including more than 53% of bank executives who are concerned or very concerned about their current reliance on legacy technology and increasing technical debt.
Additionally, more than half (51%) say existing technology/technical debt is hindering their bank’s success.
Bank executives also note the following key concerns for 2024:
- 65% are most concerned about protecting and growing their deposits.
- 59% believe fraud will be their biggest concern by 2024.
- 58% believe that human resources are the biggest challenge to digital business banking success, while 46% believe capabilities/competency gaps and budgets are cause for concern.
“2023 was a challenging year for bankers, and now, as they look to enter a strong 2024, they face a complex environment of economic uncertainty, the introduction of new payments, modernization of existing payments, and customer adoption of APIs and embedded banking. said Jim Gillespie, Chief Product Officer at Dragonfly Financial Technologies.
“Prioritizing technical debt will be key in 2024. Dragonfly research identifies short-term winners and losers as banks seek to make the most of tight budgets.”
Bankers are responding by planning to invest in new technologies that will not only improve customer experience but also help reduce technical debt.
Some key technology investments include:
- Real-time payments – 63% of bank executives say they are likely to add FedNow services to their payments portfolio.
- 67% of bank executives are willing to introduce FinTech applications, including NetSuite and QuickBooks, to their customers.
- API Banking Adoption Is Essential in 2024 57% of bank executives believe API banking will provide connections to impactful applications.
The survey also found that banks are cautiously moving more of their operations to the cloud.
84% of bank executives surveyed said their bank already operates in the cloud, while 16% of banks that do not operate in the cloud said their bank is planning a move to the cloud.
Banks are moving some of their operations to the cloud, but they are less inclined to move to a cloud-based model, with only 8% running more than 75% of their operations in the cloud to date.
As banks invest more in technology resources, it becomes important to focus on adding the high-quality services that business customers want.
One way to achieve this goal is to look at configurable embedded banking solutions that allow banks to incrementally add services and improve overall functionality.