The highly anticipated 2024 Jack Henry™ Strategy Benchmark results are in!
Jack Henry’s sixth annual study uncovers key insights and valuable takeaways from bank and credit union CEOs to help you capitalize on market shifts and new opportunities, refine your strategic plan, and compete successfully in 2024 and 2025.
Below are the key takeaways from the 2024 study.
Growing deposits is the top strategic priority for all financial institutions in 2024 and 2025. In fact, 72% of bank CEOs say growing deposits is paramount. As expenses put downward pressure on net income, banks rolled into 2024 with greater urgency around improving operational efficiency – the second top priority.
The top concerns for banks over the next two years are:
- Net interest margin (NIM) compression
- Deposit attrition/displacement
- Talent acquisition and retention
80% of all financial institutions plan to increase technology spend over the next two years, with fraud detection/mitigation, digital banking, and data analytics expected to be the top three technology investments in 2024 and 2025.
Plus, 92% of financial institutions plan to embed fintech into their digital banking experiences. plan to embed payments fintech, with banks specifically looking to fintechs for help with small and medium-sized business (SMB) services and treasury management.
Plans for launching Banking-as-a-Service (BaaS) business lines (to embed banking into third-party, non-bank brands) has been significantly tempered by increased regulatory scrutiny and related compliance costs introduced in 2023. In fact, only 30% of financial institutions cite BaaS plans in 2024 and 2025.
90% of financial institutions plan to serve a niche market over the next two years.
- Banks (86%) will target businesses.
- 78% of all respondents plan to expand services for SMBs (including payments, business credit/lending, and merchant services).
Most financial institutions (96%) plan to add payment services within the next two years. FedNow® Service is the top priority followed by digital card issuance, contactless cards, and same-day ACH. The percentage of bank CEOs planning to add real-time payments from The Clearing House has doubled this year.
97% of respondents plan to enhance their lending capabilities, with banks focusing on automated workflow and custom/automated financial spreading.
Although fraud is the leading technology investment planned for 2024 and 2025, all financial institutions agree check fraud is the biggest fraud threat, followed by romance/investment scams and account takeovers. Respondents cite social engineering of employees and data breaches as their top cyber threats this year and next.
In 2024 and 2025, strategic priority and technology investment plans mimic the market at large, as financial institutions are pressured to increase profitability and address non-interest income concerns while fighting to remain relevant through rising competition and turbulent market conditions.
The need to automate expensive and manually intensive processes is top of mind and top of budget for financial institutions as we round out 2024 and head into 2025. To this end, enterprise workflow, robotic process automation (RPA), Machine Learning (ML), and AI are in demand – not to mention strategic agility in the open-banking era of data-driven financial services.
Banks that proactively take advantage of market shifts are better positioned to capture upside potential and mitigate downside risk – no matter how the economy unfolds in 2024 and 2025.
Download the 2024 Strategy Benchmark to help you your strategy and compete more effectively.
