Strategic Inflection Points in 2022 Drive Market Shifts in 2023

Sponsored by Jack Henry™

The Jack Henry™ Strategic Priorities Benchmark Study is a treasure trove of information to help credit unions of all sizes and demographics plan and prepare for their near- and long-term futures.

Our fifth annual study uncovers the specific goals, areas of opportunity and strategic plans of bank and credit union CEOs over the next two years.

Key takeaways from the study include:

• Growing deposits and improving operational efficiency are top priorities for all financial institutions in 2023 and 2024, with credit unions being keenly focused on leveraging data, improving the member experience and acquiring new members.
   
• 79% of all financial institutions plan to increase technology spending over the next two years, with most planning to increase investments between 6% and 10%.
   
• Digital banking, fraud/security and data analytics are the top three tech investments planned over the next two years, with credit unions giving outsized priority to investments in artificial intelligence.
   
• Beyond a shared fear of deposit attrition and displacement, banks and credit unions differ in their top concerns, with credit unions’ main concern being an economic slowdown and an attendant rise in delinquencies.
   
• 90% of all financial institutions plan to embed fintechs into their digital banking experiences, with 65% planning to embed payments fintechs. Credit unions are specifically looking to embed digital marketing and consumer financial health fintechs.
   
• With downward pressure on retail revenues, serving small and medium-sized businesses is a key priority for most financial institutions. In fact, 65% plan to expand SMB services with commercial lending topping the list of SMB services banks and credit unions plan to add.
   
• 95% of all financial institutions plan to enhance their lending capabilities. Credit unions will enter 2024 with a focus on automated decisioning/funding, cross-selling and leveraging automated intelligence for underwriting.
   
• Banks and credit unions are focused on expanding lending types across the board. While most financial institutions (67%) plan to expand small business lending, credit unions are focused on home equity lines of credit (61%) as well as direct (70%) and indirect (39%) auto lending.
   
• 90% of financial institutions plan to add new payments services over the next two years. Adding FedNow^® Service (66%) and a person-to-person alternative to Zelle^® (46%) are the top two payments priorities, with one-third of financial institutions also planning to offer Payments-as-a-Service to third parties.
   
• Phishing attacks and data breaches are considered the top fraud/security threats by all financial institutions over the next two years, with credit unions (69%) even more concerned about real-time payments fraud.

Consistent and continuous evaluation in addition to understanding your peers’ plans and priorities allows you to innovate faster, close strategic gaps and capture market share.

Shifting and reprioritizing your goals based on market or technological changes is critical to staying competitive in an overcrowded market. Credit unions that proactively take advantage of market shifts are better positioned to capture upside potential and mitigate downside risk—no matter how the economy unfolds in 2023.

We encourage you to stay agile, reflect on the upcoming year and assess how your strategic priorities align with those of your peers to help you remain relevant and capitalize upon new opportunities as they emerge.

For more information, read the full 2023 Strategic Priorities Benchmark Study.

Jennifer Geis is senior analyst/payments/corporate strategy at CUES Supplier member Jack Henry™. She has over 20 years of experience in the financial services sector. Her tenure includes working for a large regional financial institution and two of the top financial service solutions providers in the U.S. In her current role, Geis shares expertise in the payments and analytics space, working with the Jack Henry payments teams as the liaison between product and executive members to recommend product enhancements, vendor partnerships and forecast payment trends. She is a frequent speaker at industry events and contributes regularly to industry publications and blogs. She works remotely from St. Petersburg, Florida where she lives with her husband, three children and two dogs.