Banks face a number of tough questions when it comes to technology spending. When does it make sense to invest in a new technology, and when does it make sense to hold off? How do you understand whether a piece of technology is accomplishing what you want it to?
Jennifer Geis and Carlos Lopez, both of Jack Henry & Associates, recently joined Laura Alix, director of research at Bank Director, to discuss these questions and more, based on Bank Director’s 2025 Technology Survey. As senior strategic advisor of research and payments, Geis specializes in payments and analytics; Lopez, who is senior analyst of digital and core banking, concentrates on financial health and wealth management. They shared insights on Gen Z’s banking habits, the payments landscape and what financial institutions should measure to understand if their tech investments are working.
The competition is no longer limited to the bank or credit union next door, and institutions must contend with a changing landscape and new threats if they want to be the center of their customers’ financial lives. “We know the average consumer has 14 to 16 different financial relationships,” Geis said. “Our attention for financial services is spread very, very thin.”
The transcript below has been edited for brevity, clarity and flow. To watch the full conversation, access the webinar recording here.
BD: Fifty-six percent of survey respondents — senior executives and board members of U.S. banks — would consider their organization a fast follower when it comes to new technology adoption. What do you think a bank needs to have, at a minimum, to be considered a fast follower?
Lopez: It depends. Who am I following? Am I following the institution across the street, or am I following Chime? Because those timelines are a little bit different in terms of adoption of new tech and new strategies.
Geis: It’s hard to even be a fast follower — let alone an innovator — when technology is moving so fast. I think the basics are data and analytics. If, for example, your organization waits to form an opinion or a direction on its data strategy, that’s typically too late. At that point, the technology has moved on as well as the competition, and then the next best thing is happening.
BD: We saw a big year-over-year jump in those who cited improvements to operational efficiency as a primary objective guiding their tech strategy. What do you make of that?
Geis: What it says to me is banks need to do more with less. They need to be deliberate about their tech spend and resource allocation.
If banks want to compete, they need to focus on, in addition to the operational efficiency, deposits and attracting customers. What are you doing to attract the next generation of account holders?
When we look at the future of financial services, Gen Z is reported to be the most durable predictor of what the future will look like. And in five years, they generate more payments per capita than any other demographic. They drive new small business formation, and they also prefer debit cards. We know every bank and credit union offers a debit card, but so do the fintech firms. The fintech firms are leading with the debit card and very robust digital [user experience] to capture this market share. As Gen Z gets older, I think it would be important to watch the habits of Gen Z as they move throughout the financial services system.
BD: What do you see as common gaps in community banks’ offerings for Gen Z?
Lopez: One of the biggest we see is cashflow forecasting and cashflow visualization. There are so many benefits that come with this on the consumer and the business side. You need the data, but then if you can say, “We know over this month, over this quarter, here’s what your expenses look like, here’s what your income or your revenue look like … You’re going to be at a cash shortage or a cash surplus, and here are some of the offerings that we have that can help you.”
It’s a huge cross-sell opportunity, but also you’re meeting a need, especially for Gen Z. [There’s an opportunity in] understanding their bills, understanding what their income looks like and then tying all of that to their short- and long-term financial goals.
Geis: There should be a data strategy, and there should be a payments strategy.
We keep getting new payment rails, but every time a new payment rail is introduced, the old one does not go away. We still have checks; we still use cash. So, the rails are adding up. An incoming payment is a deposit, so if we want to increase deposits, we need to be able to receive payments from multiple rails, multiple times of day and in multiple use cases. Getting a handle around payments on the digital side, both for consumers and businesses, is super important.
BD: Sixty-eight percent of bank leaders said they do not measure return on investment from their technology projects. For banks that aren’t doing that, how can they start?
Lopez: One of the biggest things that needs to be done right off the bat is understanding your legacy tech debt. What is going into managing your current tech stack? How much are we losing in efficiency? What is the cost to get of it? What is keeping us from our main key performance indicators? Before you can even get to what is our return for future investment, what are we investing now just to maintain all of this legacy tech?
Geis: You can’t track what you don’t measure, so it’s really important to start measuring and tracking things like deposits, loans, transaction volume in ongoing and outgoing payments. How many of your payment transactions are going to Venmo or Square or PayPal data flows? If you’re using open banking, where is your data flowing in and out? Customer engagement, all of those things are KPIs that can be measured first and tracked later to help with setting your objectives for your ROI.
Previous