Banking Technology Upgrades Disrupt Customer Services

More than half of surveyed American banks and credit unions say recent technology upgrades have caused problems for customers, according to research that exposes the difficulties financial institutions face when replacing ageing digital systems.

A study released on Tuesday by technology testing company Go-Live Faster found that 51% of respondents had experienced negative customer effects after a system launch within the previous year. Some 66% missed expected implementation deadlines, while 46% exceeded their budgets. The findings were based on interviews conducted by Datos Insights with 61 institutions holding between $5 billion and $100 billion in assets.

Integration difficulties were the most frequently cited cause of delays, identified by 85% of respondents, followed by testing data or migration problems at 70%. Eighteen per cent said a technology transition had produced higher-than-normal customer departures. Some estimated delays cost $100,000 to $400,000 monthly. Although banks are increasingly interested in artificial intelligence, only 3% reported fully incorporating it into their system integration and user acceptance testing. Most remained at planning, pilot or partial adoption stages.

The findings underline the distance between purchasing modern banking software and putting it into service reliably. Institutions are under pressure to offer faster payments and improved digital access, but disruptions can damage relationships with customers who depend on uninterrupted account services. The survey covers a small, selected group of mid-sized and larger institutions, not the entire US banking sector. Even so, it suggests that testing, data preparation and implementation discipline deserve as much attention as the technologies banks purchase.