The 19th annual Bankers as Buyers explores how the industry can build a more resilient tomorrow for financial institutions of all sizes. This includes acquiring top banking talent, ensuring seamless technology integrations to digitization initiatives, and better meeting customer and prospect needs. In the second edition of our two-part blog series, we outline the top trends we’re watching in banking this year.
Trending towards Home Equity and Mortage Lending
In an attempt to control rising inflation, the Federal Reserve confirmed that they would be increasing interest rates three to four times in 2022. However, the market for home equity lending is predicted to remain strong, with rates reaching near historic lows. Financial institutions will be investing in technologies that enable better digital experiences, speed up lending, and educate borrowers better about their financial health.
With API technology being a big driver, banks are changing their approach to choosing solutions. Another trend we will see is the investment in workflow technology in the digitization process. Banks are expected to offer more innovative financing options this year to compete with the increasing number of choices from non-bank competitors.
Driving Customer Growth in Non-Mortgage Lending
Opposed to home equity lending, the rising interest rates will slow down non-mortgage lending, leaving banks the opportunity to focus more on how to drive customer growth on the deposit side. In a recent IDC report, 65% of consumers across all channels will try an instant finance option. This prediction leaves banks with the opportunity to develop plug-ins to offer spot financing for customers looking to purchase large ticket items.
Technology has made many sectors in the financial space easier, but we can’t discount the importance of relationship and management skills in the lending space. “The larger community banks and the regional banks can be expected to remain profitable if they can attract and retain the talent needed to maintain customer relationships and dominate that space,” said Rod Taylor, Founder and CEO of Taylor & Company.
Mastering Customer Acquisition and Retention
We’re seeing more neo-banks, non-banks, and fintech surfacing than ever before. To stay relevant, it’s essential for banks to focus on customer acquisition and retention within the year. Affinity-driven banking is in high demand right now. Sean Banks, a partner at TTV Capital, shared this sentiment by saying, “Constituencies with specific interests are looking for banking opportunities that reflect their values or their wants, needs and desires or a community investment opportunity.”
Vendors are taking note of this interest and white labeling these types of technologies to help banks build an acquisition funnel for the next generation of customers. In 2022, banks will continue to strive to be at the center of their customers’ financial relationships.
Investing in Cybersecurity
Cybersecurity has been a topic of discussion in the financial industry since technology was first introduced. A recent Wipfli report stated that nearly four in five banks reported cybersecurity as their top concern. This year, cybersecurity will be among banks’ leading three technology investments. New federal rules imposed late last year will require banks to stay ahead of security threats and increase visibility for customers on cybersecurity incidents.
As the world of banking evolves, our strategies must follow to remain successful. We hope you’ve enjoyed our Bankers as Buyers recap series and for more insights from leading industry professionals, download the full report.