In the latest annual survey by Jack Henry & Associates, bank and credit union CEOs have identified growing deposits and increasing operational efficiency as their top priorities. This insight emerges from Jack Henry’s 2024 Strategy Benchmark, which reflects the strategic focuses and challenges faced by financial institutions in a dynamic economic environment.
The survey, which gathered responses from financial institution CEOs, indicates a pressing need to enhance operational efficiency, particularly through automation in back-office processes. This is seen as crucial to managing rising deposit costs and maintaining healthy net interest margins.
With rising deposit costs putting pressure on net interest margins, banks and credit unions have greater urgency to enhance operational efficiency.
Lee Wetherington, Senior Director of Corporate Strategy at Jack Henry
Strategic Investment in Technology
The benchmark study revealed that an overwhelming majority (80%) of financial institutions plan to increase their technology spending over the next two years. Key areas for investment include:
- fraud detection and mitigation
- digital banking enhancements
- advanced data analytics
These technologies are critical in addressing the escalating cyber and fraud threats, as well as improving the overall customer banking experience.
Divergence in Focus Areas
The survey also uncovered that while nearly all respondents (97%) plan to enhance their lending solutions, there is a sharp divergence in focus between banks and credit unions. Banks are more inclined towards automating workflow and custom financial spreading, whereas credit unions are leaning towards employing artificial intelligence for underwriting and automated prequalification campaigns.
Another significant finding from the survey is that 78% of financial institutions are looking to expand their services for small businesses. Top services being considered include:
- payments
- business credit and lending
- merchant services
This reflects a growing recognition of the importance of small businesses to the local and national economy and the role of financial institutions in supporting their growth.
