As financial institutions dive into budget season and planning for 2026, one statistic should make every executive pause: complex tech environments are expensive.
According to Cornerstone Advisors, financial institutions now spend 15% (median) of non-interest expenses on technology, with retail-focused institutions spending $1 in every $5.
That’s 50% higher than just six years ago, and this spend is expected to reach 20-25% of NIE within five years.
The question isn’t whether you’re spending more on technology—you are. The real question is whether these investments are delivering the returns your institution needs to thrive.
The Hidden Costs of Complexity
While budget committees scrutinize every line item, the true cost of complex tech environments extends far beyond the software licenses and implementation fees. Consider the opportunity costs lurking beneath the surface:
Employee dissatisfaction and churn plague institutions struggling with fragmented systems. When your staff spends more time wrestling with technology than serving customers or members, productivity plummets and talent walks out the door. The latest research shows that operational friction directly correlates with employee turnover—a cost that rarely appears in IT business cases.
Limited agility becomes your competitive Achilles’ heel. While nimble fintech startups deploy new capabilities in weeks, traditional FIs find themselves locked into lengthy development cycles, unable to respond quickly to market opportunities or consumer demands.
Data silos prevent you from leveraging your most valuable asset—customer and member information. When critical data is trapped across disparate systems, strategic decision-making suffers, and personalization opportunities disappear.
Rethinking ROI: Making the Intangible Tangible
Budget season demands a fundamental shift in how we evaluate technology investments. The days of reverse-engineering business cases to justify predetermined purchases are gone.
Start with problems, not products. Before any vendor demo or product evaluation, clearly define the business challenge you’re aiming to solve. Bring revenue leaders into the conversation from day one. Their perspective on pain points and opportunities should help drive technology decisions, not just IT checklists.
Expand your success metrics to capture true ROI. While internal rate of return calculations have their place, focus on other quantitative metrics that matter: increased revenue per relationship, improved productivity per teller, reduced spend on paper, printing and mailing costs, or competitive advantages like faster loan closing times. These tangible outcomes create lasting value.
Partner with vendors who measure to manage. The right technology partner doesn’t just sell software—they help you define success metrics and track progress toward your goals. Look for vendors who are truly invested in your ROI, not just their recurring revenue.
Quick Wins That Deliver Real Impact
While comprehensive digital transformation takes time, smart institutions can identify opportunities that deliver immediate, measurable efficiency gains.
Consider the following three critical operational areas as a great starting point:
Branch Operations
Cash automation represents one of the most straightforward ROI drivers for retail operations. Fully integrated solutions that connect directly with cash handling equipment, like Teller Cash Recyclers and your FI’s core system eliminate the daily grind of manual reconciliation. These systems can reduce transaction processing time to just 30-60 seconds, reducing branch wait times so your tellers can serve more customers and members. The most dramatic improvement? End-of-day balancing time typically drops from 30+ minutes per day to less than 5 minutes—freeing up staff to leave on time while virtually eliminating human error.
Document Workflows
eSignatures are another strategic investment that allow FIs to reclaim hours previously lost to manual document processing, not to mention the time spent waiting for customers and members to schedule time at the branch to sign documents.
Institutions can work smarter, not just faster, by replacing outdated manual workflows with automation that routes documents to the right person, at the right time. All while cutting operational expenses tied to paper, printing and storage.
Similarly, automated loan boarding transforms what was once a manual, time-intensive operation into a streamlined workflow. Solutions like Kinective can interface directly with loan origination platforms to collect and map required data elements, typically handling hundreds of unique data points per loan while reducing manual data entry by up to 90%. This automation delivers a 75% reduction in processing time while enhancing accuracy and compliance. The bottom-line impact? Faster processing, faster funding and faster time to revenue.
Regulatory & Compliance
Every efficiency gain from automation also strengthens your compliance posture. Technology reduces the risk of human error—whether manually balancing a TCR after hours or boarding loan data to the core. Modern eSignature platforms built specifically for banking and automated loan boarding systems maintain comprehensive documentation of each transaction, signing ceremony, and data movement, creating audit trails that streamline regulatory reviews and reduce examination stress.
All of these solutions offer measurable returns within months, not years, providing proof points for larger strategic investments.
The Bottom Line this Budget Season
As you finalize 2026 budgets, remember that technology spending isn’t optional—but wasteful technology spending is.
Challenge every proposed investment with simple questions: What specific business problem does this solve? How will we measure success? Who will champion adoption?
The institutions that thrive in the coming years won’t be those that spend the most on technology, but those that spend the smartest.
In a world where 25% of your expenses could soon flow to technology, making every dollar count isn’t just good business—it’s essential for survival.
Budget season is your opportunity to break the cycle of complex, expensive tech environments that deliver underwhelming returns. The question is: will you take it?
