3 Banking Leaders’ Priority Projects in 2025 – And How They Picked Them
How do community bank leaders prioritize upgrades amidst changes in technology, regulation, and competition? From AI integration to FedNow, here's how three presidents/CEOs balance innovation, customer needs, and long-term growth to stay ahead.
By Matt Doffing, Senior Editor at The Financial Brand
There are only so many work hours in a year and only so much budget to cover projects that upgrade a banking institution. The objectives that must occur often find spots atop the to-do list, but what defines top placement when banking changes with each year?
The past 15 years have brought a steady drumbeat of change. Bank presidents and CEOs often talked about changes in regulation after the Dodd-Frank Act in 2010. Change came in the following years from technology developed by the industry and disruptive innovation from new entrants that often operated with greater freedom from regulatory scrutiny. In 2023, economics – inflation and rapid interest rate increases – rekindled competition for funding after years of banks operating with "too much" cash. Now, rapid changes in interest rates last year apply new pressure to retain customers and members.
Across regulation, technology, competition, and deposits, banks and credit unions must determine which initiatives are a must-do in 2025 among all there is to do. So, what makes a must? Here’s how three community bank leaders answered the question.
Focus on Differentiation to Define Prioritization
Paul Hoffmann
President
Lake Ridge Bank (Middleton, Wisc.)
Assets: $3.3 billion
What upgrade initiatives have you chosen to prioritize? Why?
During the past few years, we’ve invested in parallel initiatives that you might call "singles and doubles." We’ve focused on technology improvements, but not technology alone. Our tech upgrades complemented our investment in face-to-face interactions with clients as we work to serve them as advisors.
Many of our tech initiatives have centered on process automation and efficiency. We’ve been looking for ways to save 15 minutes here or a half hour there because we want to serve our clients more accurately, more thoroughly, or more quickly. Our more recent technology investments align with the physical upgrades in ways that show clients we’re serious about serving them.
This results in benefits visible to clients in a few ways. We’ve improved our mobile banking to ensure people can stay up to date with alerts and that we’re aiding them with information, such as a credit score and budgeting tools, to help them make financial decisions. We wanted our staff to have more details on our clients—are they using bill pay, credit card, or debit card, for example—without researching different systems.
We’ve also invested in co-working spaces at branches for small businesses and other clients; one of our branches now has a coffee shop. It has become the heart of the neighborhood.
Similar to going to the doctor, people today don’t tend to visit us in person unless they have a purpose or need a solution. We want to be like that doctor and help them with advice, getting something fixed, or answering a question. Our initiatives recently have helped us provide a "financial health condition" report where we know their information and can have a more advisory conversation.
How did you determine which initiatives to prioritize?
Clients have a greater world of choices today compared to 15 years ago. When people thought of banking back then, there were a few choices, but there was a local component to their decision-making. Now, people are more comfortable with non-local transactions. This trend began with their retirement and financial activity with Vanguard or Charles Schwab. It has now spread to lending products like Buy Now Pay Later, cards and payments, and all the other fintech providers that have expanded their options.
With so many new things out there, we developed a roadmap for our initiatives two years ago. Some initiatives, for example, are no-brainers because they are both urgent and important. Often, though, if it’s an upgrade that is a no-brainer, everybody else is doing it in the industry. Leaders can find it appealing to swing for the fences. Writing a big check for a larger project, though, often requires significant resources, time, and discipline.
We try to distinguish by asking: Are clients going to use it? Are they going to see value in it? Are they going to stay loyal to our bank because of it? Are they going to bank more with us because of it? There’s a lot out there, especially in technology, but does the client say, ‘Wow, I love my bank more because it’s made my life better or easier?’ The key to discerning between these initiatives is the client.
We work to stay focused because it’s the golden age of bank technology right now.
When initiatives are needed but don’t receive budget and prioritization in a year, how does the bank ensure they aren’t missed? Can you give an example of how you handled this?
We use a road map to guide and keep track of initiatives, even the ones that don’t get priority. We also keep track of tools or software we might use to support those initiatives because they can sometimes require as much research as the initiatives themselves. We also have an executive, a Chief Technology Officer, who keeps that roadmap and tracks our progress. That person needs to know banking but they also need to have maintained that innovation perspective.
Some initiatives are not the priority, but we still work on them in meaningful ways over a few years. We’ve geared up AI for internal use, for example, so that staff can search and find answers to questions we’ve already documented. That makes us faster, and the answers they find are already in our language and align with our branding and approach to serving customers.
How Mission Defines the Must-Have
Jill Sung
CEO
Abacus Federal Savings Bank (New York, N.Y.)
Assets: $320 million
What upgrade initiative/s have you chosen to prioritize? Why?
We must be ready if the Federal government begins sending Social Security and other benefits via FedNow, and have begun researching how we bring it to customers.
Bankers are very aware of FedNow, the real-time payment infrastructure from the Federal Reserve that allows financial institutions to provide instant payment services to their customers. Abacus Federal is working on utilizing FedNow in receive-only mode.
There should not be much risk in receiving faster payments depending upon whom the bank receives it from. If it’s coming from the federal government, then generally, there shouldn’t be risk. I am looking into now what happens if there is a mistake: Can they reverse the transaction? Probably not, but this is where we’re researching our next step.
How did you determine which initiatives to prioritize?
Abacus Federal is a minority depository institution founded by my father to provide for the credit needs of underserved areas of New York City; we focus on the Asian American and Pacific Islander communities, specifically in Chinatown, Brooklyn, and Queens. For new technology, we have to be focused and ask serious questions about how this product or service can positively impact our mission. That allows me to clear away all the other noise and get very specific.
With FedNow, it is straightforward; we need to be ready to serve our customers. As we look to grow, we must remain mindful that our capital comes from retained earnings, and therefore, we need to be careful about what we invest in, including technology. Other banks could grow in previous years because of large money inflows during the pandemic. But then there is always a danger that if an institution leverages against those types of deposits, they may be temporary. Serving customers in ways that make clear sense, such as FedNow, offers us ways to grow the deposit base conservatively and how we serve our communities with credit.
When initiatives are needed but don’t receive budget and prioritization in a year, how does the bank ensure they aren’t missed? Can you give an example of how you handled this?
We’re not the kind of bank where technology drives our strategy. I have a strategy focused on what I know my customer needs. So, what do I need to do to get them there? We don’t have a committee, but we do have strategic initiatives to serve our mission. If the idea, system, or technology touches a strategic initiative, we keep it on our roadmap.
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Adapt to Gain Deposit Advantage
Stephen Clements
President & CEO
Citizens First Bank (Clinton, Iowa)
Assets: $311 million
What upgrade initiative/s have you chosen to prioritize? Why?
Citizens First Bank has focused its efforts on technology and deposits in recent years. We’ve invested in technology to remain competitive for the consumers who are not as inclined to walk into one of our branches.
Deposits have been harder to come by over the years because of the fintech options available these days. Citizens First has chosen to invest in technologies like online account opening, including digital funding integration, FedNow Adoption, and person-to-person payments, to name a few, because they create an ease of access that we must add now.
While we are community-focused and are always here to serve our customers in person, we know we must adapt and change now, or it could be a much harder hill to climb as the speed of technology continually increases. We are also investing in technologies to protect our customers and their assets better – and the bank’s as well.
We are now working to assemble an AI Steering Committee to analyze the opportunities for AI integration to create efficiencies and assist in the organization’s growth. This committee will also have a focus on monitoring regulatory guidance when it comes to AI and digital assets.
We also are taking a much harder look at vendor management in 2025. Significant changes have been made in our vendor contracts over the years. We want to ensure that we maximize the benefits of those contracts and that we are not committed to components of those contracts that limit the bank’s growth. We have many partnerships to manage, and I genuinely believe our vendors want us to succeed. Still, it is on us as an institution to ensure we receive the full benefit of that relationship.
How did you determine which initiatives to prioritize?
Citizens First is nearing its 25th year in business, and we have always prioritized initiatives based on what is best for our customers, community, and employees. Banks can offer many products and services these days, and we have always subscribed to the idea that we want to invest in practical solutions that make our customer’s banking experience enjoyable and, most importantly, safe.
Positive Pay is an example of a practical solution that also improves the banking experience. Fraud is not slowing down. A tool like Positive Pay has a cost and is not a profit center, but it does help us protect businesses against check and ACH fraud. Initiatives are essential and have become a higher priority as safety measures for our business customers.
When initiatives are needed but don’t receive budget and prioritization in a year, how does the bank ensure they aren’t missed? Can you give an example of how you handled this?
We work with our vendors to create roadmaps for the various products and services and then make a strategic plan for the year broken out into quarters. Sometimes, the cost is too great to implement, or we want to push out the project until we have a firmer comfort level with the solution. We always want to strategize about a solution internally before heading down the path of chasing the next greatest technology.
An example is our new youth debit card, which we recently introduced. We have had an idea for a teen-focused debit card account for a few years to help capture a younger customer demographic. After researching several programs, we decided to build our own account with a touchless debit card and a focus on the mobile app, wearable technology, custom limits, and enhanced security features that provide protection for our teen customers and their parents.
Defining Must-Do as a Strategic Discipline
In an industry where the most important decisions before The Great Recession were deposit pricing and commercial loan risk, community banking leaders are adapting to prioritizing initiatives across the spectrum – compliance, technology, and competition. And they’re doing it during rapid interest rate shifts since 2023 and an economy in 2025 that looks like it could either enter recession or face resurging inflation.
To meet the scope and speed of that change, leader agreed to stay focused on their customers, even if that meant prioritizing initiatives with less flash, to discern "must-do" initiatives from "nice-to-haves."