The landscape of digital banking is evolving.
The 2026 Jack Henry™ Strategy Benchmark reveals a clear mindset shift: instead of rushing to adopt the latest technologies at any cost, financial institutions are prioritizing more strategic, purpose-driven investments. The focus is now on optimizing and refining existing tools and platforms to better align with long-term strategies and goals. This strategic pivot is reflected in a much more measured pace of technology investment compared to the double-digit spending increases seen during earlier phases of digital transformation.
Fueling this is the rise of AI-enabled solutions.
With the potential to reduce operational expenses through automation and deliver hyper-personalized experiences for accountholders, AI tools are helping banks and credit unions create more value with each investment dollar. In fact, plans to invest in AI increased by double digits year-over-year, claiming the number one spot on tech spend plans for the first time ever.
Consumer and business expectations for digital platforms continue to climb.
In today's competitive market, offering basic or impersonal services risk losing users to more polished alternatives.
The future lies in platforms that prioritize addressing financial needs first and offering tailored products and solutions second. Banks and credit unions embracing relationship-based banking – enhanced with the benefits of open banking and embedded finance – are better positioned to build trust, brand loyalty, and ongoing engagement.
It's crucial to avoid the "feature creep" that bloats offerings without adding value.
By prioritizing the accountholder experience and focusing on their evolving needs, you can drive continuous engagement – transforming one-time transactions into lasting relationships. The approach not only addresses financial fragmentation but also re-establishes you as a central, trusted partner in your accountholders' financial lives.
A core element for delivering engaging and personalized experiences is the collection, orchestration, and analysis of proprietary data, such as goals, spending habits, and app interactions. This data is key to better understanding your accountholders' needs and addressing the pain points in their digital journey.
In an feature-saturated market, data is king. The challenge is that the average consumer has between 15 and 20 financial relationships, meaning no single financial institution has access to the majority of their financial data. This fragmentation is particularly true with younger generations.
The foundation of meaningful engagement and personalized experiences is the collection, cleaning, and analysis of proprietary data (e.g., goals, spending habits, app interaction data, etc.) to better understand accountholders and address pain points in their respective financial lifecycles.
As open banking rails help overcome this fragmentation, breaking down siloes to bring together data from disparate sources is crucial to centralizing data, enabling the creation of hyper-personalized experiences, and tailoring your marketing efforts to each unique user.
Setting realistic benchmarks is also important in this crowded market.
Trying to be all things to all users can dilute your value. The key to maintaining a strong, competitive edge is clearly defining your target market. By understanding who your ideal users are and focusing on their specific needs, you can streamline your products and services to offer unique, valuable, and necessary competitive features. Additionally, studying successful players in the same niche provides insights into what works – highlighting the features and strategies that resonate with your audience.
This focused approach allows you to develop a more compelling value proposition, ensuring your products remain highly relevant, effective, and aligned with long-term success.
If your key competitive functionalities are missing or lagging behind your peers, third-party vendors and embedded finance solutions can bridge that gap.
Fintech partnerships were cited as a key driver of growth with 91% of banks and credit unions planning to embed fintech into their digital banking experiences over the next two years.
These partnerships can speed up time to market, reduce operational and regulatory burdens, and leverage the specialized expertise of fintechs for favorable outcomes. In fact, nearly all financial institution CEOs surveyed (94%) plan to embed fintech into their digital banking solutions. While the specific types of fintech vary between banks and credit unions, the majority are prioritizing embedding digital account opening, followed by payments and digital marketing.
As we look to the future, digital account opening emerges as the nexus of efficiency, growth, and user experiences.
As digital banking increasingly focuses on enhancing feature quality and refining the overall accountholder experience through partnerships, personalization, and engagement, digital account opening is set to play a big role in 2026 and 2027 tech plans.
This focus allows you to target specific niches and segments like Gen Z and small business, while nurturing sticky, accountholder-centric relationships.
Although median technology budgets increased slightly, financial institutions find it increasingly difficult to retain accountholders – even compared to just a year ago. Much of this can be attributed to a growing strategic execution gap. While product innovation remains a top priority for many, only 15% of tech budgets are allocated to growth initiatives, with the balance consumed by systems maintenance, compliance costs, and “keeping the lights on.”
The disconnect between the growing number of new technologies in the industry and money available to implement them has created a pitfall for many financial institutions.
Without a clear, strategic roadmap, many institutions find themselves chasing flashier (but superficial) digital features that fail to address the underlying structural constraints and fragmented data sets that continue to compound tech debt. As the industry shifts toward open ecosystems and embedded finance, financial institutions risk becoming “invisible” utilities behind the user experiences controlled by third parties.
To regain a lasting competitive position, financial institutions must move beyond front-end innovation and focus more on back-end orchestration. By decoupling product and pricing capabilities from legacy silos, banks and credit unions can deliver personalized, consistent experiences across both owned channels and third-party platforms. Amid ecosystem disruption, features are not a long-term strategy, but infrastructure-enabled execution is.
Digital banks, fintechs, and forward-thinking financial institutions have shown what operating on a modern tech footprint can do – dramatically boosting operational efficiency, agility, and execution. In contrast, financial institutions that fail to address technological gaps caused by growing technical debt will limit their ability to deliver meaningful innovation.
Download the 2026 Strategy Benchmark to unlock the full picture of bank and credit union priorities, investment plans, and the details behind emerging trends.
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