Jack Henry survey highlights rising tech spend, payments push among FIs

Banks and credit unions are preparing to boost technology investments and expand payment capabilities as they navigate economic uncertainty and increasing competition from fintechs, according to a new survey from Jack Henry & Associates.

The company's eighth annual Strategy Benchmark, based on responses from 193 financial institution executives, found that 88 percent of respondents expect to increase technology spending over the next two years, up from 76 percent a year earlier. Investments are expected to focus heavily on artificial intelligence, digital banking and data analytics.

AI the top choice for investment

Artificial intelligence ranked as the top planned investment area for the first time, cited by 48 percent of respondents. Digital banking and data analytics followed at 38 percent and 32 percent, respectively.

"Banks and credit unions have finally recognized their biggest competitive threat in Big Fintech and Big Crypto," Lee Wetherington, senior director of corporate strategy at Jack Henry, said in the release. Based in Monett, Mo., Jack Henry provides core processing and digital banking technology to approximately 7,400 banks and credit unions. The company has increasingly focused on open platforms that allow institutions to integrate third-party fintech solutions as competition intensifies.

Payments garners more attention

The survey also highlights a growing emphasis on payments. More than nine in 10 CEOs (94 percent) said their institutions plan to add new payment services within the next two years, though only 36 percent currently have a formal payments strategy in place.

Tap-to-pay capabilities are a key focus, with 82 percent of respondents planning to incorporate them, while nearly half (47 percent) expect to embed payments more deeply into digital banking experiences.

Expansion areas targeted

At the same time, financial institutions are targeting growth in deposits and younger customers. Deposit growth remains the top strategic priority for banks, while credit unions are placing greater emphasis on attracting Gen Z and Gen Alpha accountholders, according to the survey.

Small business services are also a major area of expansion, with three-quarters of CEOs planning to broaden offerings for small and midsize businesses. Payment services—such as real-time payments and request-to-pay capabilities—are among the most common additions.

Despite growing interest in digital assets, adoption remains limited. Only 18 percent of respondents said they plan to support stablecoins, tokenized money or cryptocurrency by the end of 2027, and just 3 percent reported having a formal strategy in place.

The findings suggest that while financial institutions are accelerating investments in emerging technologies and payments, many are still in the early stages of formalizing strategies to compete in a rapidly evolving financial services landscape.

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