Why Service and Support Should Take a Front Seat in Every Vendor Decision
By Nicole Volpe, Contributor at The Financial Brand
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The pace of change in bank technology sometimes feels relentless, as a steady stream of new providers, products, and platforms promises to reshape every aspect of a traditional institution’s operations — from go-to-market strategy and regulatory compliance to profitability and the competitive landscape.
In this environment, banks and credit unions may feel acute pressure to keep up, sometimes leading them to prioritize the latest features and functionality above all else when making new system decisions or evaluating renewals.
That instinct is likely misguided, however. Especially in fast-paced times like these, the tendency to forgo other criteria — including those that might ensure a stronger vendor relationship — in favor of a pure product checklist can set institutions up for failure later on. Yes, keeping pace with markets and competitors, and new technologies, is critical. But it’s equally important to maintain a disciplined, comprehensive approach to vendor selection, one that ensures the relationship’s stability and generativity over the medium and long term.
The dynamic is reflected in recent data:
Fintech M&A is rising again as institutions chase functionality:
According to McKinsey, fintech deal value grew 108% in 2025 versus 2024, as financial institutions continued to shift their focus toward acquiring selected technology capabilities to strengthen their stacks and product suites. A vendor acquisition, particularly by a financial buyer focused on margin expansion, adds risk for clients: Will product investment continue? Will institutional knowledge walk out the door with departing executives? Will its service culture survive?
Financial institutions are chronically underwhelmed by their tech providers:
The American Bankers Association’s most recent biannual Core Platforms Survey reports an average vendor satisfaction rating of 3.19 on a scale of 1 to 5. Core provider effectiveness scored even lower, at 2.78 — with 35% expressing outright dissatisfaction with their processor. Yet despite those low marks, 69% of respondents say they are likely to remain with their current provider at the next contract renewal, and only 19% plan to convert. When credit union leaders whose tech plans had fallen short of their goals were asked why, 53% cited insufficient vendor support or performance, 39% cited longer-than-expected implementation time, and 31% cited integration challenges, according to the 2025 FinXTech Credit Union Survey.
Financial institution leaders instinctively know service matters:
The ABA survey reveals that three of the top ten attributes institutions care about most relate directly to service and support — Do they provide timely, high-quality accountholder support? Do they support my growth and business strategy? Do they create a positive working relationship with my staff? Among those who have recently completed or are planning a core conversion, customer service was the most-cited motivating factor (42%), apart from cost.
The financial technology marketplace, in other words, is one where institutions can find themselves locked into underperforming relationships, and reluctant to absorb the cost and disruption of change even when dissatisfaction runs deep. For bank and credit union leaders, this argues for placing greater weight on service and support in both new-vendor evaluations and renewal decisions.
Impacts and Drivers
To understand the state of play, The Financial Brand turned to two recent research reports from Jack Henry — its 2025 Strategy Benchmark Survey and a new eBook: Service and Support: Critical Considerations When Selecting a Technology Provider. These reports analyze financial institutions’ technology needs and the role service and support play, and offer detailed perspective on what’s at stake:
Operational efficiency: Nearly half (47%) of credit union and bank CEOs responding to the Strategy Benchmark survey named efficiency their top strategic priority in 2025 and 2026 — the first time efficiency took the top spot. That makes sense: Fast-growing adoption of AI has forced efficiency and expense-reduction onto the radar screens of businesses in every sector. At the same time, financial institutions face their own margin constraints, as rising non-interest expense and loan-loss provisions continue to put pressure on net income growth, according to FDIC data.
Small and mid-sized institutions especially know that technology breakdowns lead to lost productivity, demanding time and attention that could go elsewhere. And they likely recognize that operational efficiency, rather than fighting against other strategic priorities, clears a path for their achievement. When systems run reliably and issues are resolved quickly, staff can focus on innovating and executing to serve accountholders better, leapfrog competitors, and drive growth.
Cost reduction: Where operational efficiency is a priority, cost reduction is never far behind — and it is equally a function of support and service quality. Unresolved technical issues, delayed updates, and emergency fixes are all expensive, whether in time or dollars. Proactive vendor support and maintenance, by contrast, helps prevent the system failures that generate those costs in the first place. It’s especially critical to engage with vendors that can effectively collaborate on system and data integrations.
Done well, integrations can drive costs down; but the converse is also true. Critical applications — from payments-as-a-service to secure AI deployments — depend on vendors with cross-platform expertise and a collaborative mindset. The financial case for excellent service is twofold: avoiding unbudgeted contingency costs and accelerating access to new, more profitable revenue streams.
Revenue: Vendor service quality, including consistent uptime and up-to-date feature sets, is a direct driver of retention and cross-sales. When accountholders’ experience is consistently positive, they are more likely to stay and to use more products and services. Even with an otherwise dependable platform, poor vendor service can still create risk. It can introduce a point of failure in, for example, onboarding or within a multichannel product suite, that creates friction and erodes revenue over time. Meanwhile, accountholder dissatisfaction can lead to account closures and negative word of mouth, which are difficult and expensive to reverse.
Reputation: A financial institution’s reputation is built on consistency and trust, and technology disruption is one of the fastest ways to erode both. Frequent outages, slow issue resolution, and, perhaps most of all, degraded system performance over time hit consumer and business accountholders hard. But responsive vendor support can limit the impact, keeping operations running smoothly and leading to a more reliable accountholder experience. The reputational damage from poor vendor service can compound quickly (see Revenue, above).
Competitive advantage: Community banks and credit unions compete on the quality of the relationships they build with accountholders. That differentiation is harder to sustain when technology problems consume staff bandwidth and chip away at the service experience. How a bank designs and deploys its open banking strategy is a prime example.
Many institutions approach open banking with trepidation, seeing it as a point of competitive exposure; but others see it as a competitive bulwark that strengthens accountholder relationships at a time when the average consumer has between 15 to 20 financial relationships of different kinds.
The gap between those that can capitalize on open banking to build primacy and those reduced to the role of data contributor is widening. Execution is critical: Can an institution, with its vendors, leverage its tech platforms and integrate diverse data sources to create hyperpersonalized experiences and tailored marketing?
Regulatory compliance: Perhaps nowhere are the stakes of vendor service quality higher than in the regulatory domain. Financial institutions operate in a compliance environment that is very much in flux. When technology issues go unresolved, or when a vendor is slow to implement updates required by new rules, the institution bears the risk.
Non-compliance can expose the institution to fines, increased oversight, and in the worst cases, reputational damage. It helps to think about service and support as distinct value-adds: High-quality service means timely remediation; high-quality support means the vendor stays current and keeps you apprised of what’s coming.
Rethinking Vendor Decision-Making
When structuring RFPs and designing evaluation processes, bank and credit union leaders should resist the pull toward pure feature-and-function checklists. RFPs should go deep on service and support quality. Evaluation teams should closely review client satisfaction survey data, case resolution times, and client tenure statistics. They should ask about client support team structure and ratios (e.g., representatives per customer). They should dig into the work of advisory councils and user groups: Are they active? Have they been able to influence the vendor in meaningful ways? All of these answers expose a provider’s culture and indicate the kind of partnership a client can expect.
Small and midsized banks and credit unions today are being squeezed from three directions: they’re competing with a far more diverse range of rivals than ever before; they’re grappling with increasing regulatory change; and they’re improvising in the face of mounting pressure to deploy AI responsibly and cost-effectively. All three demand technology partners that are flexible, collaborative, and able to catalyze an institution’s growth.
