As the banking landscape evolves and becomes even more competitive, the right technologies and strategies make all the difference. So, each year CSI takes the industry’s pulse, surveying bank executives from across the country about their plans and priorities for the coming year.
Our resultant Banking Priorities Executive Report analyzes their responses and examines the industry overall to provide bankers and other industry professionals with actionable insight. In addition to showing CSI what you care about most, it also reveals how banks can maintain a competitive edge, meet those priorities and better serve their customers.
As we look forward to 2022, let’s review some of the major takeaways from last year’s report:
COVID-19 forever changed the industry.
Responding to a global pandemic led to massive upheavals throughout 2020 and into 2021. Yet, banks scored themselves favorably for their response to the virus and safety protocols. Notably, banks were most proud of their PPP loan disbursement and ability to maintain branch safety.
However, banks had more difficulty transitioning to digital channels and managing a remote workforce. These challenges represented opportunities for improvement throughout 2021.
- 97% acknowledged an irrevocable change in customer behavior, favoring digital channels
- 75% expected digital channel usage to continue growing
- Executives considered customer expectations as the second biggest challenge, with 19% selecting it as their top priority
Digital transformation remains a primary goal.
Digital transformation has been a priority for years, but many institutions still have a great deal of work to do, as exemplified by the nearly 80% still printing at least half of their statements, for instance.
Nevertheless, bankers planned to further meet customer expectations by prioritizing technologies that would advance digital transformation:
- 59% listed digital account opening as one of their top three focuses
- 45% sought to invest in or improve their mobile banking app
- 43% prioritized digital lending
However, banks must better capture and utilize customer data.
To expand market share, institutions planned to optimize current digital channels first, then invest in new technologies. However, fewer prioritized customer data use. This created an interesting discrepancy, as a clear view of customers and their needs makes the aforementioned goals attainable.
Here are several eye-opening statistics regarding customer data:
- Only 17% listed utilizing customer data as a primary method to increase market share
- Banks graded themselves a mediocre 2.8/5 for collecting and using customer data
- 43% planned to do better and focus on customer relationship management (CRM)
Cybersecurity is more critical than ever.
As employee and customer interactions moved to the digital realm, threats from bad actors followed. With a surge of cyber threats, data privacy and cybersecurity became a primary point of focus in 2020 and continued throughout 2021. These trends stand only to expand in the coming year.
- 34% of bankers reported cybersecurity threats as their top concern, more than any other challenge
- 80% listed some form of social engineering as a primary threat
- 85% planned to invest in cybersecurity training for employees, customers or both
Data privacy and BSA/AML modernization were significant regulatory concerns.
Spurred in part by an incoming administration, regulatory change ranked third in bankers’ minds as the issue that would most affect the financial industry. However, bankers felt confident with their ability to meet the challenges, giving themselves a 4.1/5 in compliance readiness.
As bankers considered regulatory compliance:
- Data privacy ranked as the most important, averaging 4.6/5
- BSA/AML modernization followed close behind, averaging 4.1/5
- Vendor management and CECL fell within the middle range, averaging 3.8/5 and 3.4/5, respectively
Public cloud was still poorly understood.
Public cloud services modernize business operations for financial institutions, especially as consumers leverage digital channels. As institutions navigate complex regulatory requirements and customer demands, many are turning to the public cloud for a reliable, secure and compliant IT infrastructure.
However, last year, many bankers weren’t sure what to think:
- 58% said they didn’t have enough information to know whether they’d invest in public cloud
- 20% were in the process of evaluating whether it worked for them
- The remaining 22% diverged evenly between those who had determined not to invest or were already using public cloud
Share Your Banking Priorities for 2022
The above just scratches the surface of the overall findings that you can unpack in last year’s Banking Priorities Executive Report. The report also offers datasets, demographics, additional commentary and perspective on topics like payments, APIs and other tech investments. This year’s report promises to do the same and provide a holistic perspective of how the industry has changed—or hasn’t—this year.
As 2021 nears its end, it’s worthwhile to reflect on where your institution was a year ago and wishes to be a year from now. What will drive your institution and the industry at large forward in 2022?