Place Your Bets!

Bankers challenged to do more with limited budgets are starting to signal where they plan to place their bets in 2024. And while experts will have you believe banks are interested in adding cryptocurrency, blockchain and GenAI, most banks are looking to safer tech bets to bolster their digital business banking offerings and limit their reliance on legacy technologies.

Over the past year, banks have been reluctant to invest in tech spend, but that’s changing in 2024 according to industry expert Ron Shevlin at Cornerstone Advisor and Dragonfly’s recent “State of Banking” report, which surveyed more than 100 banking executives on their priorities for the coming year.

The Dragonfly “State of Banking” report revealed bank executives were upbeat about the banking industry with 85% stating a positive outlook for 2024 and that reflects their willingness to invest in technology. Overall, 92% of respondents surveyed believe banks are expecting to increase their tech spend (51%) or stay the same (41%), with less than 8% expecting to decrease their tech spend in 2024.

Coincidently, it’s not hard to connect the dots with the increasing legacy debt problem in the banking industry. More than 53% of respondents are concerned or very concerned about their current dependency on legacy technology and rising tech debt. Furthermore, over half (51%) said legacy technology/tech debt is standing in the way of their bank’s success.

While tech debt remains an issue, bankers are prioritizing adding new technologies like real-time payments, including FedNow, and FinTech applications such as NetSuite and QuickBooks. But the key to adding these services seamlessly is by adopting API banking. 57% of survey respondents believe API banking will provide impactful applications and connections. To this point, the report found that even more banks are experimenting with the cloud with 84% of respondents stating their banks have some operations in the cloud.

In the high-stakes game of technological advancement, achieving widespread cloud and generative AI adoption appear to be viewed as bets with longer odds. Banks, previously holding their cards close, are now revealing their hand by investing in self-improvement, playing the strategic move to outsmart the agile FinTech players. Whether it’s adding new FinTech applications or API-based technologies, banks can see short-term profits while realizing long-term gains if they bet on the right digital business banking technologies. To get more insights from banking executives, download a copy of the full report.