Jack Henry & Associates (JKHY) RBC FinTech Conference summary

Company overview and market positioning

• Operates as a financial technology firm serving US banks and credit unions with a diverse product portfolio and a strategic focus on technology-driven solutions.

• IT demand among clients is growing at 6%-10% annually, with technology seen as central to addressing industry challenges.

• Top client priorities include deposit gathering, loan growth, and operating efficiency, with digital transformation remaining a key investment area.

• Holds significant market share among mid-sized banks and credit unions, with 23% in banks and nearly 50% in credit unions between $500M and $10B in assets.

• Business model is based on account holders, transactions, and assets rather than the number of financial institutions.

Technology strategy and modernization

• Ongoing tech modernization focuses on unbundling the core system into modules, enabling phased migration and reducing risk for clients.

• Transitioning to a public cloud, API-first, single platform approach, with strong client and large institution interest.

• About 72% of customers have migrated to the private cloud, providing a revenue tailwind and operational efficiencies.

• Public cloud adoption for core systems is paced by regulatory readiness, though many ancillary products are already cloud-native.

• R&D spend remains at 14%-15% of revenue, supporting both modernization and ongoing enhancements to existing products.

Product innovation and digital banking

• Banno digital banking platform has over 11 million users, offering a unified experience across devices and supporting both retail and business clients.

• Banno for Business launched as an add-on, enabling commercial banking features and third-party integrations.

• AI is being embedded in digital tools to enhance customer service and operational efficiency.

• Plans to offer Banno to non-core customers by year-end, expanding market reach.

• Continuous innovation allows for rapid feature updates, meeting evolving customer expectations.