Dragonfly surveyed over 100 bank executives to gain insights into their bank’s biggest challenges, spending initiatives and tech preferences for 2024.
Dragonfly Financial Technologies Corp., a digital banking and treasury management FinTech, released the findings of its “State of Banking” survey. Dragonfly surveyed over 100 bank executives to gain insights into their bank’s biggest challenges, spending initiatives and tech preferences for 2024. Bank executives were overwhelmingly bullish about the banking industry with 85% stating a positive outlook for 2024. With renewed optimism, 51% of respondents believe banks are expecting to increase their tech spend or stay the same (41%). While less than 8% are expecting to decrease their tech spend 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 tech debt. Furthermore, over half (51%) said legacy technology/tech debt is standing in the way of their bank’s success. Bank executives also note 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 the biggest challenges to digital business banking success are staffing resources, while 46% believe feature function/competitive gaps and budget are cause for concern.
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“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,” said Jim Gillespie, chief product officer of Dragonfly Financial Technologies. “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 that will not only improve their customers’ experiences but help them trim down technology debt. Some key technology investments include:
- Real-time payments, with 63% of bank executives stating they are likely to add FedNow service to their payments’ portfolio.
- 67% of bank executives are open to introducing FinTech applications, including NetSuite and QuickBooks, to customers.
- API banking adoption is a must have in 2024, 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. 84% of banking executives polled said 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.
As banks invest more in technology resources, it will be important to focus on adding quality services that their business customers want. One way to accomplish this goal is to look at composable embedded banking solutions that enable banks to gradually add services and improve overall feature functionality.
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