MEMPHIS, Tenn.–(BUSINESS WIRE)–Strategic Resource Management (SRM), an independent advisory firm serving financial institutions and other industries across North America and Europe, today shared commentary on the trends it predicts will have the most significant impacts in 2023.
Staffing challenges will persist. Financial institutions must have comprehensive plans to retain and attract income producers when there is upward pressure on wages. They must emphasize corporate culture and employee engagement programs for effective employee retention. Investments in professional development are essential for institutions to have happy and satisfied employees.
Institutions must have a deeper awareness and understanding of the fintech market. Even if they don’t make investments right away, banks and credit unions need to allocate funds to research what strategies are available, meet with vendors, and assess whether it makes sense to partner with technology or pursue investments.
A battle for deposits has started. Competition for deposits will be a significant focus for banks and credit unions in 2023, forcing many to use proven methods and new approaches to ensure depositors stay in the fold. Deposits provide critical, low-cost and, hopefully, stable financing of loans. They also offer an entry point to market loans and fee-based products and services. Pricing strategies, segmentation, employee training and marketing will be critical to success.
Digital assets will become more widespread. More regulation is coming for digital assets, which will create clearer driving rules. The recent implosion of major crypto firms may present an opportunity for trusted financial institutions like banks and credit unions – but they need to do their homework before diving in. Remember that adequate technology and infrastructure are more relevant than fluctuating coin values. Now is the time for banks and credit unions to budget for due diligence, even if they have no immediate plans to offer services for digital assets. Digital mapping should be considered to set up the necessary capabilities to add the technology when the institution is ready.
ITMs are growing in popularity. As many institutions close and consolidate branches, they must still meet the needs of specific customer segments while managing complex, high-value transactions. Interactive Teller Machines (ITMs) are a great way to fill this gap.
According to the American Bankers Association, a typical ITM can cost $55,000 to $80,000, excluding one-time infrastructure costs that range from $250,000 to $500,000. Yet financial institutions can potentially recoup their costs many times over – if they educate and market to customers properly.
Banks and credit unions will follow closely the enormous opportunity the metaverse provides. JPMorgan Chase and HSBC have dipped their toes into the metaverse, and more institutions will probably follow suit in 2023. The metaverse is based on the exchange of goods and services, and we expect more development around the financial infrastructure in the coming months. Users need safe, accessible payment methods and asset storage in the metaverse – that’s where banks and credit unions can demonstrate their value and utility.
“Budgeting has become significantly more complex for banks and credit unions as there are an increasing number of new technologies, products and services for them to consider,” said Paul Davis, Director of Market Intelligence at SRM.
“This year, the most successful institutions will focus on what will most effectively help them attract and retain customers. Fintech, ITM and AI are three areas that offer a lot of promise, so institutions considering these expenditures must understand the long-term ROI they provide to ensure that the technology will support the organization’s vision and goals well,” Davis added.
About SRM
Strategic Resource Management (SRM) has helped more than 1,000 financial institutions add more than $5 billion in value to their bottom line in areas such as payments, digital transformation, core processing, digital assets and overall operational efficiency. SRM has lowered costs, created revenue opportunities, increased productivity and given customers a competitive advantage in an environment of constant and accelerating change. Visit www.srmcorp.com for more information, and follow us on LinkedIn and Twitter for timely and relevant insight.
