How Banks Are Reshaping Tech Budgets in 2025: Balancing Cost, Innovation & Customer Expectations
Niklas Damhofer
2025 is forcing banks to make sharper choices with their technology budgets. After years of heavy digital investment, economic pressure, rising regulation, and relentless competition from fintechs mean leaders must balance cost discipline with innovation. Customers expect seamless, always-on services. Regulators expect resilience. Shareholders expect efficiency. The question for every bank: how to do it all without breaking the budget?
Tech Budgets Under Pressure: “Run the Bank” vs. “Change the Bank”
Across the industry, most technology spending still goes to “run the bank” functions, keeping core systems running, maintaining security, and ensuring compliance. According to BCG, as much as 70% of budgets are consumed by operational and regulatory needs. This leaves only a fraction for innovation and transformation.
Yet the cost of standing still is high. Legacy systems are expensive to maintain, and patchwork fixes only add complexity. McKinsey notes that banks with optimized tech spending can cut costs by up to 30% while freeing resources for innovation.
The shift is clear: leaders are not just trimming costs. They are rebalancing spend toward platforms that modernize the bank while controlling overhead.
What’s Driving the Shift in 2025?
Regulatory Pressures
Cybersecurity, data privacy, and operational resilience remain at the top of the agenda. With stricter reporting and compliance requirements, banks must allocate more funds to systems that monitor risk and automate compliance.
Customer Experience Expectations
Seamless digital banking, personalized financial services, and 24/7 availability are no longer optional. Accenture’s 2025 trends highlight how customer loyalty hinges on predictive, frictionless experiences. Falling short risks losing market share to fintechs and digital-only banks.
Fintech and Big Tech Competition
Fintech challengers are agile, lean, and customer-centric. Big Tech is entering financial services with scale and superior tech stacks. This forces traditional banks to modernize quickly, moving toward cloud-native, API-driven architectures that enable speed and flexibility.
Efficiency Mandates from the Boardroom
KPMG research shows cost transformation is a board-level mandate. CFOs are pushing CIOs to prove ROI on every dollar spent, focusing on technology that delivers measurable impact, whether in process automation, fraud detection, or ATM network efficiency.
Smarter Spending: Where Banks Are Investing in 2025
Banks are reshaping their budgets with a sharper lens on efficiency and innovation:
Cloud and Core Modernization – Migrating from legacy systems to flexible, scalable platforms.
AI and Advanced Analytics – Unlocking value from customer data and improving decision-making.
Cybersecurity – Investing in predictive security and automated defenses.
ATM and Branch Technology – Optimizing self-service and cash operations while reducing costs.
Process Automation – Deploying RPA and intelligent workflows to reduce manual effort.
The winners will be those who treat tech spending as a portfolio, balancing the stability of “run” investments with bold bets on transformation.
The Partner Advantage: Why Banks Can’t Do It Alone
The complexity of balancing regulation, cost, and innovation makes partnership essential. Internal teams cannot cover every layer especially in areas like self-service device management, where resilience and efficiency are critical.
That’s where SBS comes in. We deliver modern, multivendor banking and ATM software that helps banks:
Streamline operations with advanced monitoring and automation.
Enhance customer experience across ATMs and self-service channels.
Stay compliant and secure with proven, reliable solutions.
Free up budgets for innovation by reducing “run the bank” costs.
Conclusion: 2025 Belongs to the Smart Spenders
In 2025, banks that thrive will be those that spend smarter, not bigger. They will reallocate budgets to maximize efficiency, modernize outdated systems, and invest in customer-centric innovation.
The balancing act is tough, but with the right partners, it’s achievable. At SBS, we help banks get more out of every euro invested in technology, especially in ATM and self-service management.
If your goal is to control costs, drive innovation, and exceed customer expectations, we’re the partner to help you make it happen.