- Key insight: Community banks have long been reliant on — and constrained by — a handful of core-banking technology vendors. But enterprise artificial intelligence licenses offer the chance to transcend those limitations.
- What's at stake: Stepping out with an enterprise AI license isn't without risk, but it offers a path to more control within the bank and less reliance on the core vendor.
- Forward look: Since community banks own the risk either way, let it be risk they designed, not one handed to them by a core.
American Banker reported recently that Jack Henry will use Google's AI to defend the 7,400 community banks and credit unions it serves (
The headline is security, but what's underneath is how each core's road map and implementation weaknesses limit community banking's horizon of what's possible. And this technological crossroads with AI is an opportunity to change the
Community banks are essentially branches of our cores.
As the article noted, three companies control the infrastructure of community banking, and while community banking has character in people, strategies, logos, the underlying industry technology has limitations. Our ceilings are the same.
Community bankers sit alongside our neighbors in the bleachers, pews and booths. We're rooted in the places we serve, our homes, building trust over generations. It's no great realization to say community banking clients choose to bank with people. Beyond the mission, the app, the branding, and all the things we bankers focus on, it really comes down to people.
Yet for all the trust we build over time, the execution of our banking depends on our core.
When we experience a core outage, it's our reputation that takes the hit. Clients look at us. The goodwill and trust bankers have built erodes a little bit each time the app experiences latency or any pronounced service degradation.
And as the regulatory guidance clearly notes, banks own their vendors' problems.
So, while the industry is seeking security, we're also demanding solutions. Thousands of us laboring to hold three behemoths accountable while looking to the future.
Read more:
The top-performing banks with $2B to $10B of assets in 2025 How Block's using its license to threaten traditional bank lending Will banks get in on the prediction market gold rush ?Jack Henry is using Google AI to defend 7,400 institutions
Yet the underlying core technology is decades old, with newer services overlaid in subsequent acquisitions. Compounding these issues is the siloed nature of the core's operations, which impedes execution, to say nothing of innovation. The innovations that do arrive feel like a mask over what's underneath. The mask ultimately eats the face.
The article quotes the ICBA, which said that partnering with core providers "is the most practical, and often the only, path forward for community banks seeking to responsibly leverage AI."
I'd argue the opposite. AI is a known accelerator. AI is also, importantly, an equalizer. Building with it requires no coding experience. If you can articulate what you envision — if you can type it — you can execute it. The knowledge community banks need has been sitting in our vaults for generations, in the minds of bankers. We were never short on vision. We've been constricted by an imbalance in providers and restrained by their lack of innovation.
We're already captive to the cores. Stepping out with an enterprise AI license isn't without risk, but it offers a path to more control within the bank and less reliance on the core vendor. Analytics, franchise insights, portfolio intelligence are within our grasp, allowing us to build toward our own vision rather than what's prescribed. Obviously, we need a core processor for core transactions. But going beyond transaction processing requires us to look beyond the core.
Let the cores defend the industry's security with Google, OpenAI or Anthropic, if the core technology can functionally interface. But as their announcement admits, their move to reach out to one of those three is the same one available to any of us with an enterprise license. Proof for our industry that AI is an equalizer.
Vendor technology risk, such as the industry will take with AI, isn't new. We already bear the brunt of our cores' issues. Community banks shoulder immense vendor technology risk every day, and no guidance covers it all. Taking on AI is a continuation of the risk management we're already implementing, using our principles: Be smart, be vigilant, apply common sense. And if we own the risk either way, let's own the risk we designed, not one handed to us by a core.
Community banking's technology future cannot be entrusted to the core. Our cores won't lead us home. Acknowledging this reveals a generational opportunity to push back, to craft our own solutions rather than have them designed for us.
To craft your bank in your image, rather than in the image of a prescribed solution.
The gap is the banker's to close, and it is the bankers who will lead us home.
