Temenos (SIX: TEMN), a global leader in banking technology, today announced new research with Celent highlighting a widening gap between what US banking customers increasingly expect and banks’ ability to deliver.

Published in “The Banking Expectation Gap: US Consumer Edition,” the findings identify a “switchable middle”: the 75% who are only “moderately satisfied” or less with their primary financial institution. At the same time, 62% of US banks say it has become more difficult to win and retain customers over the past 12 months.

According to Celent, banks must respond to a new era of customer engagement shaped by AI, agentic capabilities, and rising expectations for faster, more advisory, and personalized services. Trust also has a significant impact on a customer’s decision to stay with or switch banks, making service quality and product relevance more important in a market where customers are already open to changing providers. Banks constrained by legacy systems will find it harder to meet rising expectations for smarter, more responsive banking.

Key findings from the research

Payments, fraud protection, value, and digital emerge as weak spots

Customers are dissatisfied because banks are underperforming in several areas that matter directly to their everyday experience: payments, security and fraud protection, and value for money.

Nearly half of consumers are dissatisfied with their payment services.

42% cite dissatisfaction with security and fraud protection.

Over a third are “least satisfied” with value-based offerings, including fees, rates, and rewards.

These are core parts of the banking relationship, which helps explain why dissatisfaction can translate into switching interest rather than just softer sentiment.

Capturing the switchable middle

Consumers are willing to consider switching banks when competitors offer clearer financial value and stronger digital capabilities. Four out of the top six switch drivers are related to value or trust.

51% would consider switching for better rates and fees on credit products.

42% say more personalized fee structures or rewards would matter.

39% cite better online and mobile banking features as a reason to switch.

Michael Bernard, Principal Banking Analyst, Celent, said: “The switchable middle provides both a threat and an opportunity for banks. Consumer demand is shifting from access and convenience toward personalization, trust, and guidance. Banks that can combine modern digital experiences with relationship-aware personalization and credible human support will be best positioned to retain customers and win share from both traditional competitors and digital-only challengers.”

Brian DuVal, President, North America, Temenos, said: “The challenge for US banks isn’t a lack of ambition. It is whether their technology foundations can keep pace with rising customer expectations. Modernization should translate into faster innovation, greater product flexibility and trusted AI-enabled experiences. Technology change creates competitive advantage when customers can see and feel the difference.”

Harness AI while building trust

US consumers express rising enthusiasm for AI-driven improvements in specific banking features, such as financial wellness, but also have realistic concerns about AI and still want access to a person when the issue is complex, sensitive, or high stakes.

67% would use AI-powered conversational interfaces for everyday banking.

39% use or would “definitely use” AI-powered services to make authorized purchases on their behalf.

48% of customers are concerned about privacy and data security in AI-driven banking, while 34% worry about AI errors and inaccuracies.

The findings suggest banks adding AI features will need to pair convenience with clear controls and human support, especially where trust and security shape customer choice.

Banks face core modernization challenges

Banks must focus on building the foundations for next-generation banking. A bank’s ability to align its “supply” with customer “demand” depends not only on the top of its technology stack, but also on its core foundation.

A near majority of US banks, 46%, acknowledge limitations in their current technology and legacy platform as a barrier to innovation and delivering enhancements to products and customer experiences.

30% of banks say legacy systems are a constraint on deploying Generative AI.

Over 60% are considering a transformation of their core banking systems, with over one fifth, 22%, saying it is in their top three investment priorities for 2026/27.

The report, “The Banking Expectation Gap: US Consumer Edition,” examines how evolving customer expectations, trust, and technology constraints are reshaping competition in US banking.