CSI, a leading provider of end-to-end financial software and technology, announced today the release of its annual Banking Priorities Executive report, in which the company explores community bankers’ pressing concerns, priorities and technology strategies in 2024. Independent research firm CITE Research conducted the ninth iteration of the survey, distributing it to community bankers across the U.S. throughout November 2023; 250 bankers at manager level or above responded.

Responses to this year’s survey yielded interesting insight on rising interest rates, improving the digital experience for account holders, fraud and risk mitigation, and evolving opinions on artificial intelligence’s role in banking.

“The Banking Priorities report exemplifies the strength, stability and longevity of the community banking market,” said David Culbertson, CEO and president of CSI. “We have the unique pleasure of collaborating with community bankers every day, and responses to this year’s survey reflect their curiosity, ingenuity and tenacity amid stiff competition and a challenging rate environment.”

When asked to name their top three technology investments, community bankers are prioritizing digital account opening (41%), efficiency drivers such as automation or artificial intelligence (39%) and financial wellness (37%).

“Seamless, digital account opening is a natural strategy bankers should explore to streamline access to new deposits and accelerate the customer acquisition process,” Culbertson added. “Seeing financial wellness also ranking highly on bankers’ priorities reinforces a community bank’s opportunity to serve as the epicenter of their community’s financial health. Combined with optimistic outlooks on overall growth, it’s clear that local institutions are and will remain at the heart of communities throughout the U.S.”

Key areas of interest within this year’s report include:

Continued Focus on Fighting Fraud and Risk

This year’s report reinforced bankers’ vigilance in monitoring and combating fraudulent activity. Though 30% of respondents noted fraud as the most pressing issue for the upcoming year, most respondents also expressed general confidence in their ability to reasonably prevent it. For example, card and check fraud both ranked within the top three fraud types encountered by institutions, reported by 45% and 40% of institutions, respectively. Fortunately, nearly nine in 10 respondents asserted the effectiveness of their bank’s current measures in mitigating these risks.

AI’s Impact on the Future of Banking

AI’s meteoric publicity and general popularity in 2023 solidified its place as an intriguing technology trend in the coming year. When asked which technologies would be the most impactful in 2024, 44% of bankers named artificial intelligence (AI) and machine learning, with the next key technology trend—Banking-as-a-Service—trailing at just 20% of respondents.

Overwhelmingly, bankers reported both an understanding of and strong optimism about AI’s possibilities—while also flagging they still have general concerns. More than 90% of respondents said they understand what AI is and how it can be used in banking, 89% noted their optimism about the technology’s potential, and 73% mentioned they were concerned about the potential of AI in banking. Nonetheless, bankers reinforced their curiosity by reporting an interest in AI applications across business units and functions, including sales and relationship management (92%); fraud and AML detection and prevention (92%); back-office tasks (91%); and customer service (86%).

Doubling Down on Digital Experience

Bankers are eyeing a few priorities to boost digital customer engagement in 2024, with customer identity verification (52%), data and analytics (48%), and personalized customer experiences and targeted marketing (46%) leading the initiatives. Such priorities reflect an emphasis on overall digital engagement, aligning naturally with digital account opening leading bankers’ technology investments in 2024.

“Though it scored lower in this year’s report, we caution banks not to overlook the significance of educational programs and communication as a key tenet of their account holders’ digital experiences,” said Allison Maddock, CSI’s chief product officer. “Prioritizing education and communication also helps solidify community financial institutions as financial advisers and roots them in their customers’ long-term financial journeys.”

New and Emerging Payments Priorities

Though the majority of bankers mentioned instant payments as their top payment priority in 2024 (22% chose RTP from the Clearing House and 33% selected FedNow), digital wallets also emerged as a focal point in this year’s survey. Institutions with assets ranging from $1.1 billion to $5 billion place particular emphasis on digital wallets, with a significant 64% choosing it as a key priority. This marks a substantial shift from the previous year when digital wallets were prioritized first by only 16% of bankers.

“With the increased attention on digital wallets this year, it would be wise for banks to consider implementing technologies that help them remain top of wallet,” Maddock said. “For example, enabling push provisioning within their digital banking platform is a win-win.”

To access the full report, click here. For more information on CSI, visit csiweb.com.

About CSI

As a forward-thinking software provider, Computer Services, Inc. (CSI) helps community and regional banks, as well as organizations worldwide, solve their customers’ needs through open and agile technologies. In addition to its nearly 60-year reputation for personalized service, CSI is shaping the future of banking by swiftly deploying advanced solutions that help its customers rival their competition.

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