The Banking Forecast at a Glance
The 2023 survey forecasts ongoing turbulence in key areas, while highlighting potential stabilizing forces.
The Voices of the Industry
Over 60% of respondents view employee churn (34%) or regulatory change (27%) as the most significant issue expected to affect the industry in 2023.
Despite such challenges, 88% of respondents feel highly confident in their ability to retain their customers. Their top three strategies for increasing market share revolve around continued digital transformation and utilizing data.
Most significant issue expected to affect the industry
Employee Churn
Regulatory Change
“Retention of talent will continue to be a concern as well as smaller institutions’ ability to compete with fintechs while providing seamless experiences for customers.”
Source: Survey Participant
“How can we interact and learn from more successful BaaS banks to collaborate on how to navigate this fundamental shift away from 1:1 geography-based banking and into delivering banking services through brand partners to targeted market segments?”
Source: Survey Participant
The Digital Keys to Modern Banking
Bankers plan to prioritize technologies that enhance the customer experience, such as digital account opening (55%) and digital lending (41%).
However, bankers have lingering questions about critical aspects of modern technology, including APIs, Banking as a Service (BaaS) and the public cloud. This year’s data suggests a need to better understand these concepts to fully benefit from the digital age.
Technologies bankers plan to prioritize to enhance the customer experience
Digital Account Opening
Digital Lending
The Persistent Cybersecurity Threat
P2P fraud topped respondents’ cybersecurity concerns, followed by data breaches and ransomware.
Even so, 77% of bankers claim they clearly understand their cyber risk, and 80% say their institution knows how to respond to a cyber incident within their walls.
Bankers’ top cybersecurity concerns
P2P or Other Digital Fraud
Data Breach/Disclosure
“With more and more fraud happening, we need more protection options for our customers.”
Source: Survey Participant
“Increased regulation and negative pressure on earned fees could not come at a worse time for community banks.”
Source: Survey Participant
The Challenging Regulatory Environment
As for compliance obligations, Unfair, Deceptive or Abusive Acts and Practices (UDAAP), cybersecurity and Bank Secrecy Act (BSA) modernization are taking up the most banker headspace, while fraud is viewed overwhelmingly as their most concerning compliance risk.