2025 Strategy Benchmark: Efficiency, Data, and Gen Z Are Key for Financial Institutions

By John San Filippo

You can listen to the complete interview on the TechSolutions4CUs podcast episode, TechSolutions4CUs Special! Jack Henry's Lee Wetherington Talks Tech.

Jack Henry Senior Director of Corporate Strategy Lee Wetherington recently spoke with Finopotamus about key takeaways from the company’s 2025 Strategy Benchmark Study, emphasizing the fierce focus on improving operational efficiency for both credit unions and banks. This drive for efficiency was a direct response to the considerable downward pressure on net income experienced in 2024, primarily due to rising operating expenses like staff and loan loss provisions. Wetherington noted that improving efficiency ratios in 2025 would necessitate advancements in data automation, analytics, machine learning (ML), and artificial intelligence (AI), including new agentic models. 

The Crucial Role of Data and AI

The rise of AI has been fortuitous given the increasing focus among financial institutions (FIs) on operational efficiency. However, Wetherington pointed out: “[There’s a] significant blind spot relative to whether any given credit union is ready to take advantage of the efficiency gains that AI and these other forms of automation can bring to bear, and that asterisk is, do you have the data to do it or not?”

Gen Z: The Path to Growth

According to the Strategy Benchmark, the top priority for banks was growing deposits. For credit unions, the second and third priorities, tied for importance, were growing loans and acquiring new, younger members. Wetherington acknowledged that attracting younger generations had been a perennial challenge for credit unions, and that banks faced the same issue.

Wetherington asserted that “all paths to gaining deposits on the bank side or acquiring members on the credit union side, all paths go through Gen Z.” To effectively engage Gen Z, he continued, FIs need to understand their expectations, including mobile-only account opening in under three minutes.

A crucial tactic for acquiring Gen Z is to “divorce account opening from account funding,” he explained. “You can't try to get it all done in one fell swoop. Get the account opened in less than three minutes on the phone and then give them a deadline [for funding]. And the funding mechanisms for that need to be payment apps, digital wallets, or even these other neobanks.” He noted that most financial fintechs offer debit cards that new Gen Z members can use for funding.

The Enduring Role of Branches

Despite the digital focus, Wetherington addressed the apparent resurgence in branching. He explained that for credit unions anchored to a geography or community, a physical presence remained important. For Gen Z, while mobile convenience is expected, those members still desire the option of a physical branch for “certain things to learn things that they don’t know they don’t know or to get some intensive hand holding on more complex things.”

This dual approach of digital convenience and physical presence is essential: “You’ve got to get the sub-three-minute mobile-only account opening process,’” said Wetherington. “You’ve got to check that box and they also want to know that you’re there and they can walk in and talk to a real live human being face-to-face when they get to something that’s complicated or scary or they’re trying to minimize their risk taking on a new tranche of debt.”

The Imperative of Data Aggregation: A “War”

Wetherington also believes getting a handle on data is more imperative than ever. He described the situation as “not a race, it’s a war” for data, with competitors actively trying to aggregate as much data as possible on existing and prospective accountholders. He emphasized the need for credit unions to “ask first and best” for permission to aggregate fragmented data through standardized, secure application programming interfaces (APIs).

The “art and compliance of permissioning” involves leading with clear benefits for the member. Wetherington provided an example: “We see that you have relationships with Cash App, Venmo, Chime, [or] maybe Chase. Would it be okay if we aggregated your balance and transaction data from all those different providers back here for you, so that you could see them all in one pane of glass right here at the credit union?”

This offers immediate value to the member and can be followed by further requests, like using the data to “better detect any attempted fraud on your account in real time” and “only recommending the most relevant next best product or service to you.” Wetherington stressed that credit unions should leverage the trust they have built over decades to be the first and best to ask for this permission. He coined the term “minimum viable data” (MVD) to describe the essential amount of data needed to effectively compete.

Leveraging Data for Strategic Advantage

According to Wetherington, with a preponderance of member data, opportunities are unlimited. One key application is predictive analytics for risk assessment, such as identifying members likely to default on loans. Wetherington stated that AI and ML are “really, really good at sussing out and sniffing out, if you have enough data” for signals and patterns. This allows credit unions to proactively help members avoid default, protecting revenue.

Another use case is leveraging alternative data for underwriting and creditworthiness checks, which could be automated and broaden the pool of eligible members for various loan types, supporting loan growth even in a shrinking economy.

The Future of AI: Agentic Models and Speech-to-Action

Wetherington delved into the future of AI, highlighting two key trends: the increasing size of “context windows” in models and the rise of “agentic AI.” He explained that agentic AI involves “models that are fine-tuned to do a certain defined thing or task really, really well, working with each other, talking with each other in standardized ways.” These agents, coordinating multiple models, will be able to follow complex directives, automating tasks like creating emails, routing information, verifying data, and performing calculations.

The ultimate future, within a three-year window, said Wetherington, is “speech to action, text to action.” This means users will simply speak or type what they want, and actions will be completed on their behalf. For a credit union CEO, this could translate to instant access to detailed performance comparisons and the ability to direct the creation or adjustment of financial products with a spoken command. However, Wetherington acknowledged the need for advanced fraud tools and guardrails to mitigate risks associated with such powerful capabilities. Financial institutions “don’t want to be on the ‘oh, I haven’t thought about that yet’ side” when it comes to these advancements, he noted.

Wetherington invited the Finopotamus audience to review the Jack Henry 2025 Strategy Benchmark Study for a deeper understanding of market trends, competitive priorities, and the impact of regulatory upheaval. He warned against complacency regarding regulatory burden, noting that “disregulation” at the federal level is eroding the protective “moat of the charter” for traditional financial institutions, giving non-chartered providers greater latitude. He advised, “Lean in. Don’t lean back on that front. Pay attention to what’s going on. Stick to first principles. Data drives everything. Ask first and best.”