Institutions’ Strategic Priorities
Strategic priorities give community financial institutions a clear focus on improving value and achieving long-term goals.
In 2026, technology modernization leads the way. Prioritization rises sharply with institution size, from 31% at smaller financial institutions ($100M–$250M) to 59% at larger ones ($5B–$10B). Cybersecurity and operational efficiency round out the top three, highlighting that institutions want technology and AI to improve multiple aspects of their operations.
Technology Modernization
▶︎ Institution Variance: Banks 47% | CUs 31%
Strengthening Cybersecurity
Increasing Operational Efficiencies
The survey also reveals several other areas of focus following closely behind:
Market Expansion
▶︎ Institution Variance: Banks 22% | CUs 38%
Customer Support Improvements
Customer Financial Wellness/Inclusion
Expanding Consumer Deposits
Expanding Commercial Deposits
Expanding Commercial Payment Services
Opening New Branches
Mergers & Acquisitions Activity
Commercial Loan Growth
▶︎ Institution Variance: Banks 10% | CUs 31%
Industry Insight
Tech modernization is the gateway to nearly every other strategic priority. Simplifying platforms and processes frees up IT resources for transformational investments, while integrated, cloud-native systems let institutions leverage data analytics and AI effectively. Just as importantly, modernization enables the seamless, intuitive experiences account holders now expect. These capabilities support both deposit growth on the retail side and stronger commercial client relationships.
Without modern platforms in place, institutions struggle to integrate with APIs, automate workflows or extract useful insights from their data. Financial institutions that are built on a sturdy base will be better positioned to use technology strategically, not just operationally.
Expert Perspective
Respondents’ top priorities—technology modernization, cybersecurity and operational efficiency—reflect a focus on strengthening the operational foundations that support long-term growth. These priorities are deeply interconnected: meaningful efficiency gains and secure digital experiences depend on having modern, flexible systems, clean data and integrated workflows.
While traditional growth levers like lending, branch expansion and M&A rank lower as standalone priorities, this does not signal a deprioritization of growth itself. Rather, it suggests that many institutions view technology modernization and operational readiness as table stakes for competing effectively, both to earn retail relationships and to support and retain a growing commercial portfolio.
Experts emphasize that “technology modernization” encompasses a wide range of efforts depending on an institution’s size and infrastructure—from core and digital platform upgrades to network, hardware, analytics and cloud improvements. This variation underscores the importance of tailoring modernization strategies to each institution’s starting point.
Our experts also noted that many institutions still approach technology as a series of features to implement, rather than a holistic architecture. This makes it difficult for institutions to identify the specific workflows, data connections or process changes needed to achieve the efficiencies they’re targeting. When digital investments are layered on without strong integration, clear data flows and aligned workflows, they risk improving surface experience without meaningfully improving how the institution operates or scales.
This reinforces the need for a broader mindset shift. Community institutions increasingly need to think and act like technology companies: prioritizing architecture, integration and data readiness as the foundation for meaningful modernization.