BANKING
10 BANKING INDUSTRY TRENDS TO WATCH IN 2021 By MICHAEL GOSSIE
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et’s forget about COVID-19 for a minute. What are the issues and trends that we can expect to have the biggest impact on Arizona’s banking industry heading into 2021? “That is a difficult question, as I think most of the issues, trends and innovations will all be a direct result of COVID-19,” says Kyle Kennedy, Bell Bank’s Phoenix president and Arizona banking director. “Interest rates, technology, physical workspaces — what will they look like by the end of 2021? — and culture will have the biggest impact that will extend into the next few years.” So it appears we cannot look past the tremendous impact the pandemic has had on Arizona’s banking industry. But acknowledging the elephant in the room, here are 10 issues, trends, and innovations that experts expect to have the biggest impact on the banking industry in 2021 and beyond.
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Bank branches “Prior to the days when most of us did not know the difference between COVID-19 and coronavirus, the trend of how customers use different service channels in banking was well underway,” says Brent Cannon, executive vice president and director of community banking for National Bank of Arizona. “The numbers of customers using physical branches have been declining over the last decade, online usage has been relatively flat, while mobile usage has continued to surge. Look for the trend in mobile/digital usage to continue and thus investment in these channels, and for banks to look to leverage virtual tools, especially consultative services that have historically been the domain of physical channels.”
24/7 service
“Technology continues to push the innovation envelope, especially in the banking industry,” says Don Garner, CEO of Alliance Bank of Arizona. “Customer demands are also creating a shift in how banks are delivering their services. At Alliance Bank of Arizona, we have implemented countless 24/7 tools, including online business banking, secure mobile business banking apps, fraud protection, remote deposit resources, and more to better serve businesses.”
Credit risk “Lenders always must assess whether a prior credit risk remains a viable customer in the present market,” says D. Lamar Hawkins, an attorney at Guidant Law. “For instance, a borrower that used to manufacture a gas-generated vehicle may be pushed into alternative forms of electric vehicles or it may find that it has no customers to purchase its products. If a borrower used to own commercial property in an area that
is losing business because the businesses are moving overseas, the borrower may not have enough tenants to fill its buildings and can no longer afford to pay its mortgage payments. Lenders must stay attuned to changes in the economic sector to ensure that the lending risks stay acceptable or may need to find ways to shrink their lending portfolios in less desirable markets.”
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Digital solutions “The banking industry is working to develop and enhance digital solutions for all customers – consumers, small businesses and large corporations – that make it easier for them to apply for mortgages, manage investments or pay vendors in real time,” says Amy Anderson-Vali, Arizona consumer and business banking market leader for U.S. Bank. “These are trends gaining speed and importance in the coming years across the financial services industry.”
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AB | November - December 2020
Brent Cannon
Neal Crapo