Bank Director 2026 Technology Survey: how community banks are investing to compete and grow

Executive Summary

The banking industry is entering a new era of competition driven by fintech disruption, AI innovation, evolving customer expectations, and accelerating technology investments.

The 2026 Technology Survey reveals that while community banks are increasing technology spending and embracing new capabilities, many still face challenges turning investments into measurable growth.

Download the report to explore:

• Why operational efficiency dominates technology infrastructure planning

• How fintechs are reshaping competitive dynamics
• Why Gen Z represents a critical growth opportunity
• What you can do to strengthen your data foundations and execution strategies for the future

Technology priorities are shifting. Is your strategy keeping pace?

As fintech companies become major competitive threats, community banking leaders are facing a new competitive reality. Here are five key findings you need to know:

efficiency leads technology plans, but growth remains the opportunity

Improving operational efficiency continues to dominate technology planning, with 76% of surveyed banks describing technology as a primary engine for improving efficiency, while only 24% view technology as a growth driver.

While efficiency gains matter, the findings raise an important strategic question: are technology investments helping you create new value, deepen relationships, and grow market share?

Successful banks will balance operational goals with long-term growth objectives.

fintech competition is reshaping community banking

Sixty-one percent of respondents still identify local banks and credit unions as their main competitors. But in a rising second spot, 58% said financial technology companies like PayPal and Block are a primary threat.

The segment driving the fintech market share can’t be ignored.

Over 70% of banks report having no formal strategy for attracting and retaining Gen Z and Gen Alpha customers.

Acknowledge the fintech competition and develop strategies to compete for the next generation of customers.

AI adoption is accelerating, but data readiness is lagging

In 2026, AI moved from exploration to execution.

Banks are increasing governance efforts through AI policies, employee education, and oversight programs. 
The survey found that 72% of banks have implemented generative AI and 30% have implemented agentic AI at the same time.

Banks are deploying AI faster than they’re modernizing their data infrastructure. While 64% report having a data strategy, 55% still rely on spreadsheets to manage business-line data. Additionally, use of data lakes and warehouses has declined year over year.

You should focus on data maturity by enhancing foundational data architecture and plugging data deficits.

payments are a strategic competitive advantage

Customer expectations for faster, simpler, and more flexible money movement continue to rise.

The survey reveals that only 46% of bank leaders believe their current payment offerings fully meet customer needs, while 35% report having no formal payments strategy. At the same time, adoption of real-time payments, such as FedNow® Service, mobile payment acceptance, and other modern payment services are increasing across the industry.

Leading banks are shifting from rail-based decisions to customer use, case-driven payment strategies that align technology investments with customer expectations.

technology budgets are growing, but execution challenges remain

Technology investment continues to be a priority.

More than 80% of banks increased their technology budget in fiscal year 2026 – with a median increase of 10% and a median of 11% of non-interest expenses allocated to technology. Yet technology execution remains difficult, with integration challenges emerging as the top obstacle to achieving technology objectives and the leading technology concern among respondents.

These findings underscore the importance of a modern architecture, connected ecosystems, and strategic planning that help you move faster without adding complexity.

what these technology trends mean for your bank

The survey reveals a banking industry at an inflection point.

Although community banks are increasing technology spending, embracing AI, and modernizing payments, many still face strategic gaps around customer acquisition, data readiness, integration, and growth.

Banks that successfully connect technology decisions to business strategy and outcomes will be best positioned to compete against fintechs, deepen customer relationships, and create sustainable growth.

Download the Bank Director 2026 Technology Survey to benchmark your bank, build a stronger competitive advantage, and uncover the strategies, investments, and priorities shaping the future of banking.