A new report found that community bank managers are focused on modernizing their core banking solutions in the coming year.
The report, from CSI, a leading provider of end-to-end financial software and technology, surveyed 250 community bank managers with asset sizes ranging from $100 million to $10 billion. The survey found that community bank managers hope to use modernization to improve operational efficiency and grow deposits. Overall only 2 percent of respondents said they had no plans to modernize over the next year.
“The results of this year’s report mirror what we see and hear from our customers in communities across the country,” David Culbertson, president and CEO of CSI, said. “Even as community financial institutions face tight regulations, an uncertain rate environment and concerns over fraud, they are prioritizing innovation and technologies they need to grow. As we enter the new calendar year, we look forward to working closely with our customers to address their largest opportunities on the path to modernization.”
Bankers are increasingly prioritizing back-office technologies, the report found, with 43 percent saying they would like to explore efficiency drivers like automation and artificial intelligence, and 42 percent saying they plan on placing heavier emphasis on data and analytics.
At the same time, banks are deprioritizing functions like digital account opening, in-branch technologies and digital lending, the report found. The downward trend across more customer-facing technologies suggests banks have already made significant investment in those areas or that the current interest rate environment has made a shift in priorities necessary, the report said.
Still, the report found that AI remains a blessing and a concern. Thirty-three percent of bankers cited AI as the most impactful technology trend, and 91 percent said they are interested in deploying AI-driven technologies for fraud and anti-money laundering detection and prevention. But eight in 10 respondents said they had some level of concern about AI’s potential in banking.