Banks face growing pressure to modernize, deliver seamless digital experiences, and keep pace with rapid technological change. Today’s customers expect digital-first convenience but still value the human-centric service they associate with banking. This has ushered in the era of the “total experience” in banking, where institutions must blend the digital and physical into one cohesive journey.
The “2025 State of Digital Banking Transformation in Retail Banking” survey, conducted by the marketing company TechStudio and FIS® in April 2025, found that most bank executives are increasingly focused on targeted marketing, live chat and financial wellness tools to drive growth. The survey highlights rising investment in these areas, driven by high consumer expectations for digital-first, personalized engagement.
What Do Today’s Customers Expect?
The profile of the modern banking customer has evolved significantly in the last five years. As the world shifted online, expectations for digital banking accelerated. Customers now demand more than just transactional access; they expect fast, relevant and intuitive digital experiences that feel as personal as in-person service.
Personalization has become a central pillar of customer satisfaction. When asked which digital services matter most, customers ranked targeted marketing, live chat and financial wellness tools as top priorities. These preferences signal a move beyond mere convenience toward a desire for genuine connection. Banks are now expected to anticipate needs and deliver support with precision and care.
It is no surprise that all banks surveyed are either using or actively evaluating artificial intelligence. The top use cases identified include:
• Predictive customer insights.
• Fraud detection.
• Financial wellness tools.
• Marketing personalization.
• AI-powered support.
These capabilities are critical for banks aiming to build more proactive and human-centered engagement models.
Rising Expectations Mean Higher Stakes
To meet these rising expectations, banks need the right technological foundation. According to the survey, nearly all banks now run some operations or technology in the cloud, with 42% operating more than three-quarters of their infrastructure there. This widespread adoption reflects a strategic shift toward achieving greater scalability, speed and innovation.
As banks modernize, customers demand more than just feature-rich applications. They want real-time payments, fast issue resolution and seamless experiences across every touchpoint. Digital convenience alone is no longer a differentiator. What truly matters is the fusion of speed, simplicity and personalization that feels consistent, whether a customer is online or in a branch.
The message for bank leaders is clear: Institutions that modernize with a clear purpose, guided by real customer needs, will be best positioned to build loyalty, unlock new value and lead the next chapter of retail banking.
Where Are Banks Prioritizing Investment?
Rising customer expectations are directly shaping how banks invest in technology. The survey shows that 70% of banking executives plan to increase technology infrastructure spending in 2025. This is an encouraging sign, especially given the reliance on legacy systems that were not designed for open banking, real-time data or agile feature delivery.
Many institutions are navigating a clear gap between their existing infrastructure and the capabilities needed to remain competitive. However, when paired with modular, application programming interface-driven platforms, these legacy systems can still unlock significant value. By integrating existing and new technologies, banks can fuse reliability with innovation and move forward with greater speed and confidence.
Cloud transformation remains a foundational element of digital agility. While most banks have formal cloud strategies, few are fully transformed, with many still in the early phases. Continued investment in the cloud is key to unlocking innovation, scalability, seamless data flow and the ability to deliver new capabilities faster than competitors.
Banks are also placing growing importance on seamless integration with enterprise resource planning (ERP) and accounting platforms. In parallel, interest in embedded marketplace capabilities is rising. Many institutions are exploring ways to expand offerings through fintech integrations, reflecting a broader shift toward composable, extensible platforms. Banks have an opportunity to turn this momentum into meaningful progress by integrating existing systems with modern platforms and building more connected, adaptable experiences.
Modernization With a Purpose
Retail banks are under immense pressure from rising customer expectations. To stay relevant and competitive, they must move beyond simple technical upgrades and deliver truly personalized digital experiences. What will distinguish forward-thinking banks is their ability to modernize with purpose — using agility, intelligence and unified platforms to create tangible value at every customer touchpoint.
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