Banking executives are increasingly placing their bets on technology to enhance their operations. According to a recent survey, more than half of those polled expressed intentions to increase their tech spending this year, with only 8% expecting a decrease.
The survey from Dragonfly Financial Technologies, which gathered insights from more than 100 bank executives, aimed to identify their biggest challenges, spending priorities, and tech preferences for 2024. Although many are focused on ramping up tech capabilities this year, many remain apprehensive about the limitations posed by legacy systems. In fact, 53% of respondents said they were concerned about their current reliance on legacy technology and the accompanying rise in tech debt. Nearly as many cited legacy technology and tech debt as hindrances to their bank’s success.
Key Banking Concerns for 2024
The study unveiled a myriad of concerns keeping banking executives up at night. Nearly two-thirds (65%) highlighted worries about safeguarding and growing deposits, while 59% anticipated fraud to be a significant concern in 2024.
Slightly fewer noted that the biggest challenges to digital business banking success are staffing resources, while 46% believe feature function, competitive gaps, and budget constraints are causes for concern.
Opportunities This Year
Despite navigating a complex landscape fraught with economic uncertainty, the adoption of modernized tools presents a promising avenue for banks to pursue. Many are keen on investing in new technologies to enhance customer experiences and alleviate technology debt.
Real-time payments, in particular, have emerged as a focal point, with 63% of bank executives expressing interest in integrating FedNow services into their payments portfolio.
What’s more, 67% of respondents indicated openness to incorporating fintech applications like NetSuite and QuickBooks for their customers. API banking adoption is also gaining traction, with 57% of bank executives recognizing its potential to facilitate impactful applications and connections this year.
Finally, as part of their ongoing tech efforts, banks are transitioning their operations to the cloud. A significant majority (84%) of banking executives reported that their banks are already leveraging cloud infrastructure. Among those not yet operating in the cloud, 44% said they plan to make the transition.