Earlier this summer, at our National Bankers Association Strategic Planning Meeting, we surveyed our member banks to gauge their sentiment on various topics, such as the economy, technology, and bank strategy through the first half of 2024 and looking into the year ahead. Below are some key findings and takeaways from our survey:
ECONOMY
Midway through 2024, our members are overall feeling confident in the economy and their prospects for revenue growth.
CHALLENGES
However, while our members banks are optimistic, that doesn’t mean there aren’t challenges to overcome. Recruiting and developing talent is a major pain point.
95% of the banks polled feel it is either “difficult” or “very difficult” to recruit new talent
46% are prioritizing investing training and developing staff on cultural competencies
TECHNOLOGY
Technology is also top of mind. The banks prioritized opportunities for growth and focused investments:
Digital banking is the top priority when scaling technology.
However, technology implementation remains a roadblock as many banks need to outsource and implementation costs are high.
65% of the polled banks need to outsource technology implementation to vendors
84% note high implementation costs as the main challenge in adopting new tech.
Meanwhile, AI is still an unknown among MDIs and many are taking a wait and see approach.
0 banks polled noted it as a priority on their tech roadmaps
When asking our member banks how they would use AI, it garnered mixed results:
IMPACT
Our member banks take their role as community leaders very seriously and social impact is at the core of their mission.
All of the polled banks plan to enhance impact-driven products and services in the coming year:
IMPACT STORIES
While statistics can undoubtedly provide directional insights, direct feedback from our banks is vital to understanding their individual strengths and challenges. Below, our member banks share their vision, challenges, and examples of innovative customer programs they have implemented.
“We saw the mortgage production was low as result of the high rate environment as well as high property taxes and high insurance rates. On our portfolio loans, we created an ITIN lending program for our Hispanic customers. Contrary to the idea these are subprime customers, this has been a great portfolio with us.” – Rey Garcia, Texas National
“We financed a transition project that provides affordable housing for seniors and veterans. We worked with the city to finance that project because it’s an underserved population and having access to safe housing in Columbia is crucial. It’s a way we’ve leveraged our commercial real estate acumen to meet the need for these members of our communities.” – Benita Lefft, Optus Bank
“We have a SBA 504 partnership with Momentus Capital to provide $50MM in loans to minority-owned businesses in Southern California through partnership and expanded use of Momentus SBA 504 wholesale platform for underserved communities.”
– Cynthia Newel, City First Bank
ON GROWTH/CAPITAL
“As a new bank, when the dog catches the car, deposits and loans are simply not enough. Now we have to get creative with technology and fintech partnerships without disrupting our de novo status. The biggest hurdle for us is internal expertise.”
– Kevin Boyce, Adelphi
“We’re as flush as we’ve ever been in the history of our banks as it pertains to capital. The question is how do we deploy it.”
– Fred Daniels, Citizen Trust
“We talk about digitization and we want it and we’ll get there, but we have to be methodical, deliberate and cautious because the feds have it very clear that we will pay the price for harms to the borrower. Not the fintech. Not the middleware. Not the cybersecurity you’re relying on.”
– Jaimee Collins, Liberty Bank
Summary
While MDIs remain optimistic about their future, they also are realistic about the challenges they face in competing with larger financial institutions. Consumer behaviors are driving technological innovation and banks must continue to focus on digital solutions in order to remain relevant. However, implementing these solutions is both time consuming and capital intensive. That said, mission driven institutions have always had to be creative and they will continue to push forward with inventive solutions. Their communities and customers depend on them and they take that responsibility very seriously.
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