The Intersection of Financial Institutions and Technology Leaders

2023 Technology Survey: Get in the Game

By Laura Alix

Bank leaders are reevaluating their strategic priorities in an increasingly digital landscape, but they may be missing an opportunity to better serve small businesses. 

A majority of the senior executives and board members responding  to Bank Director’s 2023 Technology Survey, sponsored by Jack Henry & Associates, say their bank offers small business clients digital capabilities including mobile deposit (93%) and payments (84%). But less than half offer deposit account opening (41%), loan applications (37%) or treasury management capabilities (36%) via the digital channel. And far fewer offer payroll services (37%), accounts payable/receivable (19%) or cash flow monitoring (11%) as part of their digital banking suite.

Banks that neglect the small business segment could risk losing those customers, especially the very smallest of them, to fintech competitors, says Lee Wetherington, senior director of corporate strategy at Jack Henry. And too often, banks can’t truly identify their small business clients.

“When it comes to small businesses, [banks are] operating with huge blinders on, because they don’t realize that somewhere between 13 and 35% of their retail DDA [demand deposit account] base are being used to run micro and small businesses,” he says. “Eighty-plus percent of all small businesses are a single person.” 

The survey also finds rising concern about the threat of digital neobanks such as Chime that have demonstrated success in growing deposits from a younger client base. While more than half of respondents still point to traditional competitors — small, local financial institutions and big/superregional banks — as their top threats, 42% say they’re concerned about neobanks that attract consumer deposits.

Just 18% of bank leaders believe their organization has the tools it needs to effectively serve Gen Z customers, between 16 and 26 years old. 

“Banks can capture Gen Z customers with mobile-only account opening that doesn’t require funding upfront, early paycheck access and automated savings options,” says Jennifer Geis, senior analyst, corporate strategy at Jack Henry.

In anonymous comments, bank leaders say it’s challenging to meet the needs of this digitally-savvy generation, especially with the limited resources available to community banks. Some worry it may already be too late for their bank to win over Gen Z.

“Are we too late to the game in the technology they want?” says one chief operating officer responding to the survey. “Have they already immersed themselves with other fintechs instead of banks?”

Key Findings

The Rising Neobank Threat
Sixty-one percent of respondents identify local banks or credit unions as their bank’s primary competitive threat, followed by big/superregional banks (56%) and neobanks that compete for consumer deposits (42%), such as Chime — a significant increase compared to last year’s survey.

Barriers To Adoption
Almost three-quarters cite integrating with the bank’s core as a chief obstacle to planned upgrades or implementations, followed by adoption or acceptance by bank staff (53%) and customer adoption (51%).

Emerging Opportunities
More than half (56%) say their board has discussed allocating budgets or resources to artificial intelligence, while 47% say the same about banking as a service. Smaller percentages have had similar discussions about blockchain (15%) or cryptocurrency and digital assets (24%).

More Dollars For Tech
A large majority (83%) of survey respondents say their bank’s technology budget increased over the past year, at a median increase of 10%. A median 15% of the technology budget is devoted to new initiatives, bank leaders report.

Seeking Board Expertise
Fifty-one percent say their board has at least one member they would consider to be a technology expert. Among those who do not,  38% say they are actively seeking a director with technology expertise.

Emphasizing Digital
This year, 44% of respondents say that digital channels are more critical to their bank’s strategy, compared with 33% who said the same last year. The percentage that rank digital channels and the branch as equally important also dropped, from 57% to 48%.

To view the high-level findings, click here.

Bank Services members can access a deeper exploration of the survey results. Members can click here to view the complete results, broken out by asset category and other relevant attributes. To find out how your bank can gain access to this exclusive report, contact

These topics will be explored at Bank Director’s Acquire or Be Acquired Conference, Jan. 28-30, 2024, in Phoenix, and Experience FinXTech, May 14-15, 2024, in Tampa.

Laura Alix is the Director of Research at Bank Director, where she collaborates on in-depth strategic research for bank directors and senior executives, including Bank Director’s annual surveys. She also writes for and edits online video content.