For years, banks and credit unions have been urged to upgrade their tech and infrastructure to support the next generation of financial services. However, with so many vendors and an overwhelming amount of information on emerging solutions, many institutions struggle to map the way forward.
In their report, 2025 Tech & Infrastructure Trends, James Wester, Co-Head of Payments, and Matthew Gaughan, Payments Analyst at Javelin Strategy & Research, detailed three key tech and infrastructure trends shaping the industry—artificial intelligence, payments modernization, and open banking—and how having the right people in place can help institutions build systems that meet rising customer expectations.
AI Across the Entire Bank
There’s little debate that artificial intelligence has been the most talked-about technology in the financial services industry over the past year. While AI may still be a new consideration for small to mid-sized banks, the largest banks have been deploying it for years.
For example, JPMorgan Chase CEO Jamie Dimon recently said that the bank has been using AI for decades and employs a team of over 2,000 AI and machine learning experts, along with data scientists. These experts have helped JPMorgan Chase implement AI across multiple areas, including marketing, fraud detection, and risk management, supported by the bank’s $12 billion annual technology budget.
Bank of America has made similar investments, using the technology to support its customer-facing chatbot, Erica, for years. The bank has also explored ways to enhance its programming capabilities through AI-driven solutions.
“It’s clear that AI is having a big impact across the entire bank at these organizations,” Gaughan said. “It’s not just some buzzword that they’re putting in outbound marketing material to make it seem like they’re on trend. Given that, it is an all-bank—front, middle, and back office—initiative where functions across those areas will be increasingly supported by AI. In the near term, it will most deeply be felt across the middle and back office.”
These offices are crucial to the institution’s operations, ensuring that its processes and products function properly. AI can supercharge anti-money laundering verification, Know Your Customer checks, fraud mitigation, and even credit scoring decisions.
Banks have also begun integrating AI into their accounting and IT operations, further expanding its impact.
“In utilizing AI across the organization, bank leaders will need to be more comfortable with the knowns and the unknowns,” Gaughan said. “It’s typical in technology investments at banks, that these are things that require steep investments where the return on that investment isn’t necessarily clear at the beginning. It’s harder to pin down beyond the potential cost savings because this will impact multiple functions across the entire bank.”
Though AI is an enterprise-wide endeavor, it is not a one-size-fits-all tech solution that can simply be plugged into any process. For this reason, banks will continue to look for top talent—both internally and externally—to navigate the complexities of AI implementation.
“The competition for tech talent will be fierce, as it always is,” Gaughan said. “The fact that JPMorgan Chase has 2,000 people focused on AI tells you there’s a lot of people needed to build out these functionalities, and that’s just one bank. Especially among the biggest banks, there’s going to be a lot of competition over tech talent.”
Modernizing Cores for the New Payments Era
For all the attention it gets, AI is far from the only technology institutions should prioritize. As customers increasingly expect modern payment solutions—such as open banking, instant payments, and embedded finance—many banks will need to upgrade their core systems.
However, determining the right scope of such an upgrade isn’t always straightforward. Additionally, many banks still don’t feel an urgency to update legacy core systems they have functioned reliably for decades.
While these systems work now, banks that have neglected to upgrade their core platforms over the last decade will find it difficult to adjust to the next wave of financial innovation.
“The ecosystem has expanded, and your core needs to be able to adapt and integrate these outside solutions more easily,” Gaughan said. “The it-isn’t-broke-don’t-fix-it mentality has worked, but band-aid fixes to connect to cores won’t be effective over the long term if consumers are expecting more forward-looking offerings like real-time account management and instant payments.”
Many of the largest financial institutions have already modernized and have the resources to continue evolving. However, beyond the top-tier banks, institutions will increasingly rely on vendors for support in their payments modernization projects.
These vendors can assist with key aspects like integrating a wide array of API connections with new payment rails and systems. They can also help banks streamline business processes and offer guidance on technology adoption. In some cases, third-party providers can even support a full-scale transformation of core banking systems and architecture.
Regardless of whether financial institutions handle modernization in-house or get third-party help, it is critical to start the process now.
“For the smallest banks, payments modernization might not be the most important thing, if they like the simplicity,” Gaughan said. “But there are over 9,000 financial institutions across the U.S., so it’s a highly fragmented market. To compete in that landscape, you’re going to want to offer these things, especially if they become table stakes. It’s better to invest now than scramble later and feel like you fell behind.”
Open Banking Puts Developers in the Spotlight
The fragmented U.S. financial landscape is one reason why efforts to import elements of the open banking model—widely adopted in many other countries—have gained traction. Open banking connects disparate institutions through third-party providers, ultimately giving consumers greater freedom of choice.
While this model might seem like a natural fit for the U.S., lawmakers have largely opted to let the market drive open banking adoption. In contrast, government mandates have accelerated its implementation in many other regions.
“In the UK, it was much easier for them to take a regulator-driven approach because there are not as many banks,” Gaughan said. “There are probably 10 to 20 institutions, and most of the usage is concentrated in the top 10. It’s much easier in a country with less banks to take a regulator-driven approach where the lawmakers set the tone and the requirements, than in the U.S.—where what works for one bank probably doesn’t work for another one.”
Still, the U.S. is beginning to make strides. According to the Financial Data Exchange—a leading nonprofit that offers banks a data-sharing standard—more than 94 million customer accounts now connect to financial institutions using its open banking standard, up from 21 million just three years ago.
This increased adoption has accelerated open banking’s momentum and thrust one community into the spotlight.
“Pulling the curtain back, it’s the developers who are the technology decision-makers who look across the vast array of these different APIs offered by banks and data aggregators as they create these new and better financial tools,” Gaughan said. “Not only are they responsible for creating APIs, they also are responsible for ensuring they adhere to evolving standards and provide useful connections into financial data.”
The key role of these tech professionals means that courting developers—making their lives easier and providing them with clear, easily accessible documentation—will become an essential product marketing strategy.
To attract developers, some banks have followed the lead of technology companies by building portals to house developer documentation. Other institutions have created sandbox environments where developers can test applications.
This developer-centric approach could lead to a substantial strategic shift for many institutions.
“Building these technology-driven communities will require a rethinking of a bank’s financial product marketing approach,” Gaughan said. “There will need to be a rethinking of its go-to-market strategies, messaging, and outreach. It means banks will need to find marketing talent that can understand financial services, technology standards, and compliance, among all the other important competencies that flow throughout this area.”
