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[Webinar] Outlook for the Future – Bank Strategy During COVID and Beyond

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Bank Strategy During COVID

 

In 2020, At the height of the COVID-19 pandemic, Insight Financial Marketing held a webinar titled, Outlook for the Future: Bank Strategy During COVID-19 and Beyond. From our discussion, it was clear how big of a role technology played in economic recovery.  We also saw banks receive increased deposit balances, as CARES Act-related assistance was disbursed to consumers and businesses.

This year we felt it was only fitting to share an update regarding the same topic, looking at bank strategy amidst the continuing impact of the pandemic and beyond.

In the presentation, we put a spotlight on three topics:

  • The pandemic’s impact on the economy and the Financial Service Industry
  • The continuous impact technology has on the Financial Service Industry
  • Actions needed for Traditional Financial Institutions to survive the future business environment

 

A Quick Guide To Bank Deposit Growth

 

COVID Impact Review

In 2020, we saw businesses close their physical offices, reopen, and for some, shut them down again. Moreover, Financial Institutions supported small businesses by rolling out PPP loans and enhanced Federal Stimulus payments quickly to help cushion these companies from the unprecedented shocks of COVID-19.

According to the Deloitte Economic Spotlight, in May 2021, there were 7.1 million fewer people in the labor force this year as opposed to February 2020. Deloitte further adds that the pandemic significantly affected employees in low-wage occupations by 5.4% compared to the higher-wage populations, which stood at 2%.

We also highlighted COVID’s impact on lending. The most notable change was the decreased rates in mortgage interests in 2020. And as of October 2021, there was a seasonal slowdown, specifically in the real estate market.

Investors Reaction to COVID-19

A review of the Nasdaq, Dow Jones, and S&P 500 indexes shows the pandemic led to a dramatic lagging of the financial market at the onset. However, in 2021, due to the multiple Federal Stimulus packages that were rolled out, the markets recovered and have increased significantly.

Outlook for the Future: How the Changing Economy Will Affect Bank Strategy and the Financial Services Industry
As for the future of retail banking, data shows that:

  • There might be an uptick in interest rates in 2022/23.
  • Due to the success of the economic assistance programs, there is an increase in the money supply.
  • Fintech and technology firms will transform how money moves.
  • As we move forward, the top 2 traditional banks will continue exerting competitive pressure.
  • Outlook for the Future: How the Changing Economy Will Affect the Financial Services Industry
  • We also discussed the changes occurring in the financial services industry, influenced by technological solutions.

FinTech companies continue to succeed because of their customized solutions that meet business and consumer needs. For instance, American Express recently established a digital business checking account for SMBs.

Decentralized finance is becoming more popular—owing to its ability to meet specific needs. With blockchain, traditional areas like saving and investments will in the future not require middlemen such as brokerage firms.

FinTech companies have become more ‘bank-like.’ For instance, Venmo has grown its offerings to include services like debit and credit cards, traditionally bank services.

There’s an increasing rise in neo-digital banks that indicates the dynamic nature of consumer behavior.

As for cryptocurrency, the number of coins and wallets continues to grow. Moreover, the terminology and technology continue to change.

Outlook for the Future: Actions FI’s Need To Make To Survive the Future Business Environment

To close the presentation, we discussed the practical steps FI’s needed to take to enable their future success and survival. First, FI’s will need to identify their value proposition. Traditionally the focus has been on financial products and services that meet customers’ desires.

However, with the advancement in technology, we’ve seen a shift in customer demands. For instance, people now expect instant solutions. And as a result, the traditional face-to-face approach is less favorable, especially from a COVID-19 standpoint. Additionally, more people want to perform basic transactions online, as it is more convenient.

Secondly, analyze your FI’s competitive edge. Once you’ve figured this out, work on implementing strategies to improve the customer experience further. Remember, while technology is the future, we certainly can’t ignore the power of good customer relationships.

Finally, your institution’s ability to stay updated on behavioral trends and lifestyle changes will provide the required customer insights that will increase your competitive edge. From payments to money transfers, leveraging data on consumers’ financial activities coupled with new technology is the most straightforward bank strategy that will deliver continued success and survival.

Contact us today to take advantage of our free, no-obligation evaluation offer to get a first-hand view of your consumer and business customers. To learn more, visit us on our website at www.infimark.com.

Contact IFM

 

Bank Strategy During COVID

 

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Help Your Customers Build Generational Wealth

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Help Your Customers Build Generational Wealth and Grow Opportunities for the Future

Interest rates continue to remain at record lows, and the recent employment numbers are showing improvement as we continue to recover from the COVID crisis.  Now that the economy is recovering, there are opportunities for financial institutions to help their customers get back on track for planning and preparing for the future.  Two of those areas include providing guidance and assistance with the planning and saving necessary to buy a home and providing the guidance, support, and services that will enable them to save for retirement.  

An article published by the US Census Bureau mentions that the most significant contributors to household wealth are home equity and retirement accounts, which accounted for 62.9% of households’ net worth.  Providing guidance and assistance in these two critical areas will help your customers build generational wealth and provide opportunities for themselves and their families in the future. 

 

A Quick Guide To Bank Deposit Growth

 

Insight Financial Marketing® (IFM®) has an industry-leading solution that provides deep insight into customer behavior and financial activity.  Using IFM’s advanced data analytics, your financial institution can identify key characteristics about your customers in near real-time and identify the segments likely to be more receptive to specific messaging in these critical areas.  

IFM offers event-based alerts and marketing campaign files that allow you to message your customers at the right time so you can provide them with the guidance and support they need to build wealth via homeownership, investing, and saving for retirement.  

To learn more about IFM’s services, you can visit our website or communicate with me directly via email or voice at rreale@infimark.com and 703-856-4060.

 

Contact IFM
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ACH Transaction Volume Growth Indicates Rapid Shift to Digital Money Movement

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ACH Volume Soars At Record Pace

Wow!! Have you seen the new information that the National Automated Clearing House Association (NACHA) has posted about ACH transaction volume during the second quarter of 2021?  Volume soared at a record pace.

According to the post, the quarterly volume of 7.3 billion was an increase of 9.9% from the same period in 2020. The value of those payments was $18.4 trillion, reflecting a nearly 25% increase from a year earlier. Additionally, during the first quarter, a “new record was set in February when ACH volume averaged more than 118 million payments per day, the ACH Network’s highest daily average for a month. The second was in March, when ACH volume hit 2.7 billion payments, the largest monthly volume in ACH Network history. This included approximately 110 million economic impact payments by Direct Deposit from the federal government.”

 

In March, ACH volume hit 2.7 billion payments, the largest monthly volume in ACH Network history.

 

Clearly, these numbers show that the COVID pandemic has accelerated a change in behavior.

amongst consumers and businesses to adopt electronic payments and digital money movement.  Drilling down further into the Q2 numbers, we see that P2P transactions increased by 24.2% from the year-ago quarter, B2B activity increased by 28.7% and internet transactions increased by 14.3%. 

These volume numbers indicate that the rapid growth of transactions within the ACH network has not only continued to grow but are now growing at a record pace.

Question:

Why are ACH transaction volumes increasing so quickly and how will financial institutions adapt to this change in behavior from a customer intelligence perspective?

Answers: 

More and more consumers are choosing to conduct their lives online and in the mobile space. This includes entertainment, travel, paying bills, sending money to family, friends or businesses, shopping, buying digital currency, being paid by Direct Deposit, and investing. Businesses are also moving away from paper checks and adopting digital payments. From a financial institution perspective, firms will be challenged as their customers will be expecting that when moments that matter occur, their financial institution will be there for them, in near real-time with the right guidance and the financial products and services that meet their needs.

Customer Expectations Are Changing To Near Real-Time

Customers will be expecting that when moments that matter occur, their financial institution will be there for them with the proper guidance, financial products, and financial services that meet their needs.

Insight Financial Marketing has an industry-leading solution that will enable your financial institution to better understand consumer and business behavior in near real-time.  We have a proprietary analytical approach that identifies pattern changes, life events, and lifestyle changes that will help your FI to deepen relationships with your consumer and business customers. To find out how IFM can help your team better engage with your customers, visit us at our website, Infimark.com, or contact Rob Reale at rreale@infimark.com.  

 

Contact IFM
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Outlook for the Future: Bank Strategy During COVID-19 and Beyond

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Insight Financial Marketing recently presented a webinar called: Outlook for the Future: Bank Strategy During COVID-19 and Beyond.

We discussed the rapid changes to the economy as well as the impact on the financial situation of consumers and businesses. Now more than ever, financial institutions must have a deep understanding of the financial needs of their consumer and business customers. If your FI has not adopted a strategy to leverage intelligence from your bank’s data to help identify customer behavior trends, it will be more difficult to keep and retain customers because of their rapidly changing needs.

The New York Times recently reported a graphic showing how states are at different stages of reopening across the country. Some are open as normal, some are reopening, some having paused their reopening, and some have reversed and are imposing new social distancing and business closings. The graphic shows how states have proceeded with balancing the spread of COVID-19 by reopening their economies. Even within the footprint of your financial institution, your customers’ financial situation may vary depending on where they live and work.

We also shared insights on how investors have reacted to COVID-19 and economic uncertainty.

Two points here:

    1. Investors have rewarded technology firms as consumers and businesses have shifted their digital behavior.
    2. Retail investors are much more active in the markets due to technology applications that have facilitated free stock trading (driven primarily by the growth of fintech firm Robinhood).

The spending behavior of consumers has been shifting as well. The top earners have dramatically reduced spending while the lowest earners have remained the same. We discussed how the CARES Act has led to a rise in deposits, especially for the largest banks in the country.   In addition, most financial institutions have seen a more modest rise in deposit balances compared to the top 5 largest banks in the US.   The combination of reduced spending by high-income earners, and the influx of stimulus and COVID relief payments from the government will not continue for long. We believe that deposit retention and growth will continue to be important in the years ahead, especially in a low rate environment.

If you are interested in viewing the 30-minute webinar, please let us know. We will gladly provide a link to view the recording.  In the meantime, check out our latest vlog for a snapshot of the webinar content.

 

 

Insight Financial Marketing is an industry leader in helping financial institutions leverage customer insights, detect behavioral changes, and adopt a strategy to better serve the rapidly changing financial needs of its consumer and business customers. To learn more about utilizing our Intelligentsia™ technology please visit our website.

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