Research identifies financial institutions'
strategic priorities for 2023 and 2024
MONETT,
Mo., May 25, 2023 /PRNewswire/ -- Deposits,
loans, data, and efficiency top the list of strategic priorities
for community and regional financial institutions, according to
Jack Henry's fifth-annual survey of bank and credit union CEOs.
The survey provides a peer benchmark for strategic planning,
which financial institutions can use to pinpoint emerging areas of
opportunity and allocate technology investments. In addition to
providing high-level insights, the survey focuses on key
competencies across technology infrastructure and major business
lines, including core, open banking, digital, lending, payments,
and risk, fraud, and security.
Key takeaways from the Strategic Priorities Benchmark Study:
- While growing deposits topped the list of priorities for banks,
leveraging data was the top priority for credit unions. Growing
deposits also ranked as the most difficult priority to
achieve.
- 79% of financial institutions (FIs) plan to increase their
technology spend over the next two years; digital banking, fraud
and security, and data analytics are the top three technology
investments planned.
- Beyond a shared fear of deposit attrition and displacement,
banks and credit unions differ in their top concerns. Banks' top
concerns include talent retention, NIM compression, and regulatory
changes, while credit unions' biggest worry is an economic slowdown
– and a related rise in delinquencies.
- 90% plan to embed fintech into their digital banking
experiences, with 65% planning to embed payments fintechs.
- 65% plan to expand services for small and medium-sized
businesses (SMBs); commercial lending tops the list of SMB services
FIs plan to add.
- Phishing and real-time payments top the most concerning
fraud/security threats.
The study's lead authors, Lee
Wetherington, senior director of corporate strategy at Jack
Henry, and Jennifer Geis, senior
strategy analyst at Jack Henry, say last year's inflection points –
changes in the business environment that required FIs to make
significant adjustments to their operation and management – gave
rise to distinct market shifts that are creating new opportunities
for banks and credit unions in 2023 and 2024. Inflation, rising
rates, and deposit churn have created a series of knock-on effects
upon which financial institutions can capitalize.
"Like all change, inflection points create fear, uncertainty,
and doubt. The instinctive response is one of withdrawal and
retrenchment," the report states. "As a financial institution,
however, you are uniquely positioned to lean on your risk
competence and capital reserves to tap upside potential while less
experienced, unchartered, and poorly capitalized providers
struggle."
"For 2023, the top priority is technology that improves deposit
retention and acquisition," Geis says. "That means options for
automated savings and investments, the ability to receive real-time
payments when FedNowSM launches, and shoring up deposit
gaps among Gen Y and Gen Z with early-paycheck access and
mobile-only account opening that doesn't require funding
upfront."
Wetherington said that, "While improving digital products and
services has been the focus over the past few years, the flux of
both 2022 and 2023 has shifted focus down stack to modernize tech
infrastructure in service of strategic agility and the real-time
data analytics necessary to fight fraud, improve UX, and establish
intra-day visibility into balance-sheet KPIs, including and
especially deposit inflows and outflows.
"Financial institutions who proactively take advantage of market
shifts are better positioned to capture upside potential and
mitigate downside risk – no matter how the economy unfolds in
2023," he added.
The study's results are based on an online survey conducted with
core clients between January and March
2023; the survey sample included Jack Henry's core clients
across the U.S. with assets ranging from $500M to $50B.
Visit the Jack Henry website to download the full eBook and learn
more.
About Jack Henry & Associates,
Inc.®
Jack Henry™ (Nasdaq:
JKHY) is a well-rounded financial technology company that
strengthens connections between financial institutions and the
people and businesses they serve. We are an S&P 500 company
that prioritizes openness, collaboration, and user centricity –
offering banks and credit unions a vibrant ecosystem of internally
developed modern capabilities as well as the ability to integrate
with leading fintechs. For more than 46 years, Jack Henry has
provided technology solutions to enable clients to innovate faster,
strategically differentiate, and successfully compete while serving
the evolving needs of their accountholders. We empower
approximately 8,000 clients with people-inspired innovation,
personal service, and insight-driven solutions that help reduce the
barriers to financial health. Additional information is available
at www.jackhenry.com.
Statements made in this news release that are not historical
facts are "forward-looking statements."Because forward-looking
statements relate to the future, they are subject to inherent risks
and uncertainties that could cause actual results to differ
materially from those expressed or implied by such statements. Such
risks and uncertainties include, but are not limited to, those
discussed in the Company's Securities and Exchange Commission
filings, including the Company's most recent reports on Form 10-K
and Form 10-Q, particularly under the heading "Risk Factors." Any
forward-looking statement made in this news release speaks only as
of the date of the news release, and the Company expressly
disclaims any obligation to publicly update or revise any
forward-looking statement, whether because of new information,
future events or otherwise.
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SOURCE Jack Henry & Associates, Inc.