As the chief economist of the American Bankers Association, James Chessen keeps an eagle eye on bank earnings, credit-card delinquencies and other metrics that provide insight into the state of the industry.
Stop taking those off-premise ATMs for granted.
The role of marketing in customer acquisition is becoming increasingly important as banks navigate rising rates, competition from fintechs and the digital migration.
Most consumers are keeping their money in low-yielding savings accounts even as rates climb ever higher and competitors try to woo them with sweeter deals.
Most banks still operate in channel silos despite vast amounts of research that show this structure leads to lost revenue, undue credit risk and widespread inefficiency.
As we enter 2019, we believe that the industry faces a new set of challenges and opportunities. We have been through two different stages of the economic recovery since the financial crisis: a period of low rates, followed by initial rate increases that benefited assets and allowed deposit rates to lag. Now we are in a third stage in which deposit betas exceed loan betas.
The banking industry appears to be in a good place as we head into 2019. The economy is strong, regulatory pressures have eased, credit losses are low and consumer confidence is high.
Don’t be so quick to close that branch.
The 2018 report reveals a perfect storm of factors that traditional brick-and-mortar banks must navigate in order to stay competitive over the next decade.
Regulators are paying more attention to deposit rates, highlighting the importance for banks to conduct a deep analysis of their portfolios so they can justify their pricing strategies.