According to a survey of more than 100 bank executives from Dragonfly Financial Technologies, a digital banking and treasury management financial technology company, executives are overwhelmingly bullish about the banking industry, with 85% having a positive outlook for 2024. With renewed optimism, 51% of respondents believe banks are expecting to increase their technology spending or to keep it the same (41%), while less than 8% are expecting to decrease their technology spending in 2024.
The survey also found some serious headwinds, with more than 53% of banking executives concerned or very concerned about their current dependency on legacy technology and rising technology debt. Furthermore, more than half of executives (51%) said legacy technology/technology debt is standing in the way of their bank’s success. Bank executives also noted the following key concerns for 2024:
- 65% are most concerned about protecting and growing deposits.
- 59% believe fraud will be a top concern in 2024.
- 58% believe staffing resources present the biggest challenge to digital business banking, while 46% believe feature function/competitive gaps and budget are cause for concern.
“2023 was a difficult year for bankers, and as they are now looking to come out strong in 2024, they are facing a complex environment with economic uncertainty, introduction of new payments, modernization of old payments, and customer adoption of APIs and embedded banking,” Jim Gillespie, chief product officer of Dragonfly Financial Technologies, said. “Prioritization of tech debt will be key in 2024, and the Dragonfly survey identified some near-term winners and losers as banks look to make the most of tight budgets.”
Bankers are responding with plans to invest in new technologies, with key technology investments including:
- Real-time payments, with 63% of bank executives stating they are likely to add FedNow service to their payments’ portfolio.
- FinTech applications, with 67% of bank executives open to introducing such applications, including NetSuite and QuickBooks, to customers.
- API banking adoption, with 57% of bank executives believing API banking will provide impactful applications and connections.
In addition, the survey revealed that banks are cautiously moving more operations to the cloud, with 84% of banking executives polled saying their banks are already operating in the cloud and of those not operating in the cloud (16%), 44% said their banks are planning a move to the cloud. While banks are moving some operations to the cloud, they are less inclined to move to a cloud-based model, with only 8% running more than 75% of operations in the cloud to date.
