Walking the Tech Tightrope: Insights from Bank Director’s Survey

Apart from being classed as the founder of modern nursing, Florence Nightingale was also a pioneering data scientist. With a love for mathematics, she used data and one of the earliest forms of infographics — a circular chart called a coxcomb — to highlight how poor hygiene and preventable diseases were killing more soldiers than battle wounds. Her clear and visual use of data helped transform healthcare policy and saved countless lives. Effectively using data was one of the key challenges highlighted by banking executives taking part in this year’s Bank Director Technology Survey. The annual survey was conducted in June and July 2025, with representatives from 141 US financial institutions (FIs) under $100B in assets. The results offer a snapshot of how many institutions — including community financial institutions (CFIs) — are navigating digital transformation, emerging technologies, and the complexities of data management.Top Tech Priorities According to the survey, improving operational efficiency remains the top strategic technology objective for FIs (65%), followed by customer acquisition and retention (25%) — a pattern consistent with previous years. These goals are driving spending decisions; 71% of respondents increased their tech budgets in 2025, with a median allocation of $2.5MM (up from $1.5MM in 2024). Despite this investment, one-third of the business leaders taking part in the survey believe their institutions should be allocating more resources to technology and innovation.  Interestingly, although technology is seen as important for FIs, only one-third of institutions consider technology a top strategic priority — suggesting some may still view tech as a support function rather than a competitive differentiator. It is key that CFIs are clear on the strategic role that technology can play, and that it is afforded appropriate priority at the board and executive levels. Many institutions have introduced board technology committees to help guide their decision-making. Ambition Outpacing ResultsKey areas that FIs have invested in over the last 18 months to improve efficiencies and customer experience include enhancing payment capabilities (37%), improving fraud resolution (35%), and rolling out digital retail account opening (33%). However, they continue to face several challenges, such as difficulties integrating with legacy systems (51%) and rising costs (44%).Over half (56%) of the respondents say they set clear objectives for tech projects. Despite progress in many areas, 41% admit that their institution’s technology initiatives had fallen short of their objectives — mainly due to insufficient vendor support, employee adoption challenges, and long implementation timelines. What’s more, only 18% track return on investment (ROI) — a missed opportunity for aligning strategy with impact. Almost two-thirds say they could be allocating more resources to improve metrics to understand ROI from tech.     It is important that CFIs consider ways to prioritize ROI measurement frameworks and build internal capabilities to assess the success of their technology initiatives. This will support better decision-making and more effective resource allocation. We share some ideas around how CFIs can harness GenAI and increase ROI in a recent BID. AI and Emerging Technologies Only 12% of the FIs that took part in the survey describe themselves as innovators, while the majority (56%) identify as "fast followers”. AI is firmly at the center of emerging tech investments, with 66% of respondents allocating budget to it in the past 18 months. Two-thirds of Fis are drafting AI acceptable use policies, while 62% are already testing AI in limited areas. Use cases for GenAI range from marketing and administration to IT and IT development. Still, concerns remain, particularly around AI-enabled fraud, which 53% of respondents are actively educating staff about.CFIs should consider piloting smaller, practical AI use cases that drive clear value — at the same time as ensuring that governance, compliance, and risk management practices are in place to support scaling these pilots at a later point. We explored some of these considerations previously regarding implementing AI and how to overcome the barriers to adoption. Data: The Underused AssetCFIs have access to rich data, but many admit they’re not making the most of it, and one-third cite ineffective data use as a top technology challenge. In fact, a significant 41% of banks still rely on spreadsheets to manage critical data, introducing risks and inefficiencies. While around half of leaders say their institutions are using data analytics effectively in areas like compliance and risk, usage lags significantly in marketing, operations, and human resources.Just 28% have invested in data analytics in the past 18 months, and 46% cite a pressing need for greater in-house expertise in data strategy and management. This represents a major gap, especially as technologies like AI demand high-quality, well-organized data to function effectively.For CFIs to make the most of the data they have access to, they need to invest in a strategic approach to managing and using their data, focusing on the tools and expertise needed to clean, centralize, and activate data across the institution.Bank Director’s 2025 Technology Survey highlights that while many FIs recognize the importance of technology, there is still a gap when it comes to execution, measuring impact, and aligning initiatives with strategic goals. As competitive pressures intensify and customer expectations continue to evolve, those CFIs that invest strategically in emerging technologies, data, and their digital offerings are likely to be best positioned to adapt, compete, and grow in an increasingly digital banking environment.