One in three bank leaders admit they’re failing to harness their data effectively enough to unlock the benefits of emerging technologies like AI, according to a new report from Bank Director.

Releasing the results of its 2025 Technology Survey alongside fintech provider Jack Henry & Associates, the banking sector journal found that persistent data issues are hampering the sector, with banks struggling to leverage the vast reserves of customer information they hold. 

Over half (56%) of banking leaders said their institution confines its data to the original systems that produce it, with the same number relying on their core provider to access data.

The study also found that 41% of banks still use isolated spreadsheets to manage data, with just 39% taking advantage of data lakes and warehouses to combine data from different sources.

Polling more than 140 C-suite executives and directors of US banks holding less than $100 billion (£73.2bn) in assets, the survey found that few financial institutions are up for tackling this challenge.

Just 28% of banking execs said that their institution has invested in data analysis platforms or capabilities over the past eighteen months, a figure that climbs to a striking 70% for banks with over $10 billion (£7.3bn) in assets.

“An inconsistent approach to data management reflects a larger underlying problem at some banks, where much work happens in silos and isn’t communicated holistically throughout the organisation”, said Lee Wetherington, senior director of corporate strategy with Jack Henry. 

“All banks have multiple systems of record for different kinds of data, but until you aggregate the data from those systems in one place, you don’t have a single source of truth to drive reliable analysis, automation, AI and strategic decision-making across the bank.”

The study shows that larger banks are much more likely to effectively use data analytics across areas like marketing, operations and human resources than their smaller competitors, though despite the data gaps, banks across the board have at least taken some initial steps into AI.

According to the report, two-thirds (66%) of financial institutions have drafted an acceptable use policy for AI, while 62% have begun experimenting with AI in limited use cases, and 32% have introduced AI tools to enhance customer experience and improve productivity.

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For most banks (65%), technology investments, including in AI, are aimed at boosting operational efficiency, with other motivations trailing far behind, such as attracting new customers (25%), staying relevant to younger generations (3%), and diversifying revenue streams (1%).

However, while 56% of bank executives said their organisation sets clear objectives for technology initiatives and investments, 41% say a tech initiative has fallen short of the objectives set for it.

Part of the issue lies in how these tech strategies are being funded and measured, with a third (33%) of execs agreeing their bank does not allocate sufficient resources to technology and innovation, and 68% failing to measure the ROI on their tech initiatives.

The lack of visibility around tech stacks is leading banks to become cautious. The report found that 56% of institutions classed themselves as ‘fast followers’, only keen to move once the groundwork has been laid, while 32% admitted to being behind the curve on technology, leaving just 12% of banks that said they were innovators.