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Insights from Bank Director's 2025 Technology Survey

The Bank Director's annual Technology Survey provides a crucial lens into how banks are adapting to an evolving financial landscape. Released on September 16, 2025, and sponsored by Jack Henry Associates, the survey found that bank leaders are increasingly aware of the challenges posed by data management and technology adoption. With artificial intelligence (AI) rapidly entering the financial sector, the findings of this survey underscore a pivotal moment for community banks aiming to compete against larger institutions and fintech disruptors.

Key Findings and Industry Insights

One significant issue identified in this survey is that many community banks possess a wealth of customer financial data but often find it difficult to leverage it effectively. Approximately one-third of respondents cited the inability to utilize data strategically as a top barrier when it comes to technological advancements. Emily McCormick, Vice President of Editorial Research at Bank Director, stated, “Smaller institutions today must compete with the biggest banks as well as financial technology providers such as PayPal, Block, and Chime—entities that are adept at leveraging data and AI.” This sentiment illustrates the heightened pressure on smaller banks, which are striving to enhance their competitive edge while navigating limitations in their data strategies.

It’s essential for banks to not only secure but also organize their data effectively. The survey revealed a variety of differing approaches to this issue. For instance, 56% maintain data within the systems that both generate and utilize it, while another 56% depend on their core vendors for data access. Nevertheless, a sizeable portion of banks still resort to traditional methods, with 41% managing data via spreadsheets and 39% employing data lakes or warehouses to consolidate information from diverse sources.

Despite these challenges, the survey indicated that some banks are making strides to invest in data analysis capabilities. Around 28% of respondents reported recent investments in these areas within the last 18 months, a statistic that shoots up to 70% among banks boasting over $10 billion in assets. This investment trend highlights an acute awareness of the necessity for efficiency, with 71% of banks having increased their technology budgets by a median of 10% this year, as stated by Jack Henry President and CEO Greg Adelson.

The Response to Artificial Intelligence

As AI continues to permeate the financial sector, a majority of survey participants affirmed that their institutions have initiated steps towards harnessing AI technologies. About 66% have developed an acceptable use policy for AI, and 62% are currently experimenting with AI in limited contexts. Furthermore, 53% are actively educating their employees about the potential threat of AI-enabled fraud. This proactive stance signifies a notable recognition of both the opportunities and risks associated with AI, validating its increasing role in the banking ecosystem.

Concerning stablecoins, just over half of the respondents expressed slight concerns over their potential impact on deposit competition, while 19% reported moderate levels of concern. Local banks and credit unions were cited as the most formidable competitors (by 60% of respondents), with bigger banks and fintech companies closely trailing.

Governance and Decision-Making

In terms of governance, the decision-making process around technology investments is central to adopting new solutions. Over half of the respondents (54%) noted that a management-level team or steering committee holds final approval for technology investments, whereas 48% mention that a C-level executive (excluding CIO or CTO) possesses that authority. Moreover, just over a quarter (27%) revealed that their board is directly involved in significant technology investment decisions.

Interestingly, only 18% of survey participants indicated that their banks measure return on investment (ROI) for technology projects, which raises concerns about the efficacy of resource allocation. Among the 33% who believe their banks fail to resource technology adequately, unclear metrics for understanding ROI emerged as a pressing issue. Despite this, 56% of respondents confirmed that clear objectives are set for technology initiatives, although 41% acknowledged that some initiatives have previously fallen short of these targets.

Looking Ahead

In summary, the 2025 Technology Survey by Bank Director highlights a critical juncture for banks as they navigate the challenges of data management and AI integration. As institutions strive to enhance their technology capabilities amid heightened market competition, the insights gathered from this survey can guide strategic decision-making and foster an environment conducive to innovation and growth.

For additional details, the complete survey results can be accessed at BankDirector.com. This critical information provides invaluable insights for stakeholders across the banking sector in navigating the complexities of modern financial services.