When you spend a week listening to fintech representatives, consultants and other technology experts talk about the future of banking, it would be easy to come away with the impression that financial institutions must act now to implement the latest and greatest innovations or face impending doom.
That was the impression at least some took away from the plethora of financial technology sessions at Bank Director’s 2026 Acquire or Be Acquired Conference (AOBA), held this week in Phoenix, Arizona.
Guy Stovall III has served as the CEO of NewFirst National Bank, the $944 million subsidiary of NewFirst Financial Group, based in El Campo, Texas, for 39 years. He primarily attended the sessions on technology, and is still trying to wrap his head around everything he heard.
“All this stuff sounds so urgent,” Stovall says. “There are so many things that you can do and you could do, and I’m way past the glitz and the whistles and the bells. It’s like, ‘What’s the fundamental thing that we need to be doing?’”
There is no doubt that financial institutions face a number of pressures in 2026. Innovations in artificial intelligence, digital currency and payments have advanced at a time when the regulatory environment is much more friendly to fintechs, crypto firms and other nonbanks seeking bank charters. How banks handle that combination of factors will be crucial to their growth, but there don’t appear to be firm answers on just how soon they have to act.
Analyzing the Pressure Points
If there was one issue that financial institution leaders could not ignore at the conference, it was artificial intelligence.
Thomas Michaud, CEO of the investment bank Keefe, Bruyette and Woods, made that point very clear in his session. He said the megabanks like JPMorgan Chase & Co. and Bank of America Corp. wouldn’t be investing billions of dollars in AI if it wasn’t going to be transformational.
Ravi Nemalikanti, chief product and technology officer at the software and consultancy firm Abrigo, said banks and credit unions have to realize AI is already transforming their industry. “If you’re an organization or institution that is not using AI, you’ll start to see that in customer experience,” he said. “I think over time we’ll see that the performance gap between institutions that use AI versus [those that] don’t use AI is going to be very, very clear.”
Warning sounds about the threat of stablecoin also rang out across the conference. Several experts say it will not only become the preferred form of instant payments for businesses, but it could also drain money out of the banking system, as nonbanks hold more and more stablecoin deposits. Under the GENIUS Act, which passed last summer, a U.S. regulated stablecoin will be backed dollar-for-dollar by U.S. Treasuries or cash. The banking lobby is currently advocating in Congress to ensure the companies holding stablecoin deposits are not allowed to offer interest on them, or any rewards that look like yields.
That issue is very much on the mind of Jim Ryan, CEO of Old National Bank, a subsidiary of $72 billion Old National Bancorp, based in Evansville, Indiana. “Think about a scenario like that,” he said. “How much lending are you all going to do in an environment where we lose 10% or 15% of our deposit base, making less money available for loans?”
Chris Dean, CEO and cofounder of the embedded finance firm Treasury Prime, said he isn’t sure increased stablecoin adoption will cause that exact scenario to play out, but he knows it will be a disruptive force. “I live in a world that sees new technologies every day. The ones at the moment are AI and stablecoin. And I can tell you without a doubt, stablecoin is very real,” he said. “It’s a thing that is going to happen in some way or another.”
Utilizing stablecoin and other forms of instant payments are some of the ways financial institutions can meet customers with the products and services they expect in 2026, said Bob Rohr, managing director of payments strategy at SRM. “Payments equals engagement,” said Rohr. “What does engagement deliver? Engagement leads to deepening. Deepening leads to retention. Retention produces sticky deposits and greater lifetime value for your customer.”
Is Time Running Out?
Despite the alarm bells going off, even those ringing them cannot say for sure just how soon banks will suffer consequences for ignoring new technologies.
Most experts agree that financial institutions need to at least start building a strategy for AI if they haven’t already done so. Larry Pruss, a managing director at SRM, agrees with Michaud and Nemalikanti that it is simply too transformative to ignore. “And the way I define a transformative tool is, if you say, ‘You can’t use it,’ and your people still use it — that’s transformative,” Pruss said.
A good first step is leveraging the existing curiosity with AI that most employees already have by asking how they use it, and then developing a strategy that lays out the best use cases for the institution moving forward. Michaud is convinced the megabanks will also play a role in setting the table for the smaller institutions. “I think you all will have a chance to be a fast follower,” he said. “I spent a lot of time with the CEOs of FIS and Jack Henry. I know that they want to deliver that for you.”
Stovall says NewFirst National Bank has an AI policy in place, but he isn’t racing to look at things like stablecoin or plug-and-play technologies that could provide more service offerings to his customers. “The pioneers are the ones that have the arrows in their back,” he says. “Sometimes, it’s better to follow a little bit and see what happens out there.”
And experts agree there can be unforeseen consequences that come from rushing into new innovations. Tara Schultz, senior vice president of strategic insights and industry relations at the core processor and technology company CSI, understands the temptation to move quickly because there is so much pressure to compete. “So, you’re adding instant gratification services, you’re adding faster payment rails,” she said. “[But] are your protections matching the features that you have in the market?”
That doesn’t mean smaller financial institutions should necessarily back off on innovation. One of the most innovative institutions is CBW Bank, an $82 million subsidiary of CB Bancshares Corp., based in Weir, Kansas. Suresh Ramamurthi, a former Google software engineer, bought the bank with his wife in 2009. It developed instant fraud protections and real-time payments, along with several other innovations. Ramamurthi agrees smaller institutions don’t need to rush into anything, but they also don’t need to limit themselves. “The U.S. is unique in the sense that 5,000 community banks could be 5,000 points of innovation as the next generation of bankers come in,” he said. “They’re a very smart next generation.”
Stovall isn’t looking to make NewFirst National Bank a point of innovation, but he does want to move the institution forward by implementing new technologies in a cautious manner. “It’s really something that you need to keep learning about, investigating, trying to come up with a tactical plan or a strategic plan in terms of how you want to use it in your company,” he says. “And I feel much more relaxed about that the more that I’m seeing because I think there are greater mistakes to be made by rushing in than there are by easing into this space.”
*This article has been updated to add cash as a reserve asset backing U.S. regulated stablecoins.
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