Retail banks are accelerating digital transformation, with most leaders increasing infrastructure budgets and nearly all operating in the cloud. Executives say AI is essential to new services and better customer experiences, which is pushing investment in platforms, data, and APIs. 👉Read the full report
Customer expectations are rising and regulators are sharpening oversight. Banks are prioritizing modular capabilities they can roll out quickly, such as digital chat, marketing offer engines, and financial wellness tools.
Essentially all banks are in the cloud with about 40 percent saying they run over 75 percent of their operations in the cloud. Many are upping their investment technology infrastructure in an effort to underpin both near-term priorities and long-term transformation goals, according to the 2025 State of Digital Banking Transformation in Retail Banking survey conducted in April 2025 by TechStudioTM, an Energize Marketing® company, in partnership with FIS®. The study found that executives recognize just how crucial AI is not only to their digitization efforts but to rolling out new services and boosting the customer experience.
To find a clear commitment to a digitized future, look no further than the budget dollars that respondents are putting toward infrastructure. More than two-thirds (68 percent) plan to increase their spending on tech infrastructure this year while the remaining cohort will maintain current spend levels. Those investments will not only meet immediate operational needs but will set the path for long-term digital banking capabilities as banks scramble to meet ever-changing customer expectations and an increasingly complex regulatory environment.
The research shows that executives understand the shifting demands of retail customers with respondents saying the desire for targeted marketing (24 percent) ranked highest followed by financial wellness tools (23 percent) and live chat support. (22 percent). Banks are responding, with 45 percent in the market for a solution for marketing offers and 50 percent planning to evaluate financial wellness tools. Slightly more than that, 56 percent, are currently assessing solutions to enhance digital chat experiences, something that they consistently ranked important to customers.
Person-to-person (P2P) payments are moving quickly beyond traditional offerings like Zelle with 70 percent of surveyed institutions planning to expand P2P payment options. The remaining 30 percent are currently evaluating their approach.
"AI chatbots understand natural language better, making support faster and giving customers
better help anytime." – Head of Product and Profitability, Regional & Community Bank, U.S.
The findings are clear, too, that AI has quickly moved from future consideration to top priority, with every bank in the survey indicating that it is implementing or evaluating generative AI. The bulk, 60 percent, will deploy it in the next 12 months while others are readying their plans to adopt it. That’s not surprising, considering they believe AI will help improve customer experience and boost efficiency—among the top use cases, 40 percent cite predictive insights like churn risk and point to next- best actions (40 percent), fraud detection (39%), and both financial wellness tools and marketing personalization (38 percent).
📊 By the Numbers: Digital Banking Transformation in Retail Banking
70% plan to expand person-to-person payment offerings
68% will increase tech infrastructure budget this year
- 12 months timeframe in which every bank is exploring or implementing GenAI
56% are evaluating digital chat experiences
Organizations best-positioned to compete against tk are moving away from one-off improvements toward a more unified, human- centric approach to digital banking. They are putting their investment dollars toward secure, cloud-ready platforms, adopting intelligent APIs and embedding real-time insights to better support customers and employees. While they start at different points, all are seeking a more seamless, connected, and responsive banking experience.
👉 To explore all findings, download the full 2025 State of Digital Banking Transformation in Retail Banking report (fielded in April 2025).