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10 topics bank execs are focusing on at DIGITAL BANKING 2022

By Stewart Bowling
Published June 3, 2022 2:52 PM
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Updated December 1, 2022 2:49 PM
1 Min Read
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American Banker’s annual DIGITAL BANKING conference from June 13-15 in Austin, Texas, brings together the industry’s leading banks, credit unions, fintechs, payments providers, merchants and regulators for powerful insights and in-depth discussions on the most pressing issues of the day.   

From the competition for top tech talent to the rise in mobile banking fraud, here are 10 topics that banking leaders are focusing on at this year’s event.

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The state of digital transformation

Digital transformation remains a top priority across the financial and professional world, but each new development seems to be so rapidly superseded by the next that organizations constantly struggle to keep up.

But while technology is seen as key to competing successfully with their peers, fewer than one third of financial and professional organizations regard themselves as leaders in the space.

However, organizations are fully committed to leveraging new technology and recognize that if they do not want to get left behind, the most important step in positioning themselves for the future is having a well-defined tech strategy.

Read more: The race against obsolescence: Future-proofing your organization
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Taking advantage of revenue diversification

Oregon Bancorp continued its streak as the top community bank in the U.S. in American Banker’s annual list of 200 top-performing publicly traded banks with less than $2 billion in assets.

Oregon’s position at the head of the rankings for a fourth year running is based on the key metric of return on average equity. The bank posted an ROAE of 32.84% in 2021, far exceeding the median for the top 200 of 13.40%.

Local commercial banking combined with a regional mortgage business that delivers strong fee revenue is the key, according to President and CEO Ryan Dempster. “That diversification has really helped us over the last several years,” Dempster said. 

Read more: Top-performing U.S. community bank shows value of revenue diversification
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Commercial banking outlook

High demand for commercial and industrial loans has fueled first quarter year-over-year growth of nearly 3% for community banks with less than $10 billion in total assets, according to S&P Global.

While some banks, such as Third Coast Bancshares in Humble, Texas, have capitalized on positive economic growth and strong demand in their regional market, rising inflation is a major concern.   

The Fed has responded by raising its benchmark rate in both March and May, pushing up the cost of borrowing. Despite this, demand for C&I loans remains strong, but with inflation now running at more than 6% for seven consecutive months, cautious optimism is the watchword on both sides.     

Read more: For lenders and their small-business customers, the outlook is mixed
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Leveraging the latest tech

“Banking is necessary, banks are not,” Bill Gates said in 1994. While the sentiment expressed may still retain an air of truth, both the banking industry and banks themselves continue to evolve to serve the needs of today’s customers.

Senior leaders in the community are currently faced with numerous challenges. Top of mind is finding the answers to several key questions about the digital transformation of the industry, including what the role of embedded finance will be, how to offer more personalization, and how to take advantage of the latest technology.

Read more: Five questions about banking in today’s digital age, answered
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Enhancing the customer experience

As many as 40% of respondents plan to switch to online banking in the next 24 months, according to the EY Future Consumer Index.

This shift in customer behavior means that to meet their clients’ new expectations, banks must rapidly change from a traditional product-centered approach to a client-centric approach that delivers smart, personalized customer experiences.      

To be successful, banks will need to focus their digital transformation initiatives on delivering real-time, end-to-end digital engagement for their customers.

Read more: Why real-time customer journey curation is the future of banking
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The increasing battle for talent

The search for talented developers, programmers and data scientists continues to intensify as financial institutions find themselves battling for top new recruits with more than the usual fintechs and nonbank technology firms.

“Banks are not just competing with other companies for talent, but with individuals who want to be doing other things with their lives,” said Accenture banking talent and organization lead Bridie Fanning.

Traditional banks that may not be able to offer tech recruits an innovation-friendly culture or more flexible compensation options are turning instead towards training existing employees in new roles, recruiting from more diverse sources and leveraging their reputation and status as trusted brands.

Read more: Banks fight for tech talent as competitors swirl
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Digital banking's focus on user experience

For regional and community banks, relationships with customers and members is a major differentiator between themselves and their large bank and fintech rivals.

Mindful of the need to provide a top online banking experience to their digitally savvy customers, 73% of bank and credit union decision makers rank user experience high on the list of their requirements for a digital banking platform in a recent survey. 

Drawing on responses from 795 digital banking customers and members in the U.S. and 150 regional and community banks, the study reveals the increasing importance of the user experience in digital banking.

Read more: How community banks and credit unions see UX in the digital banking experience
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Spotlight on DeFi

Nonfungible tokens, or NFTs, are part of a revolution taking place in the cryptocurrency world. Yet 70% of Americans don’t know what they are and a mere 2.8% actually own one.

Utilizing the same blockchain technology as crypto, NFTs are the driving force behind decentralized finance, or DeFi, an alternative monetary system in which value is stored and goods and services exchanged based on mutual agreement of the counterparties rather than by governments and banks.

As an existential threat to the existing financial system, DeFi is gaining the most traction in places around the world where the existing financial system is least beneficial. While very few Americans own NFTs, 32% of Filipinos own them, with the next largest adopters in Thailand, Malaysia, the United Arab Emirates, Vietnam, Nigeria, Brazil, Hong Kong, Venezuela and Peru. 

Read more: The revolution will not be centralized
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How to achieve customer satisfaction

Consumers classify responsive customer support and user-friendly interfaces among the top attributes they expect in their provider, according to J.D. Power’s U.S. Direct Banking Satisfaction Study.

Significantly, “the basics still matter,” said Paul McAdam, the firm’s senior director of banking and payments intelligence. “The efficiency of moving money, transferring funds and funds availability is highly important to consumers. How banks handle those types of communication with the customers says a lot about how these brands perform.”

The best performers for checking accounts in this year’s survey are Charles Schwab and Discover, tied with scores of 715 out of 1000, while American Express comes top of the list for savings accounts.

Read more: Amex, Discover, Charles Schwab lead direct banks in customer satisfaction
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The evolution of mobile banking

Consumers have accepted that mobile banking is here to stay after a recent survey declared that 86% of senior millennials, 83% of young millennials, 72% of Gen Xers, 38% of baby boomers and even 17% of seniors use their mobile phone for personal banking.

But the rise in mobile banking has been accompanied by a corresponding increase in the volume and complexity of mobile banking fraud. The most common types of cyberattacks include  the use of malware, account takeovers and identity theft, according to the report.

In response to the greater threat levels, financial institutions are focusing on ensuring their mobile apps can operate securely in an environment of heightened risk and more complex banking transactions.   

Read more: More Trust, Less Mobile Fraud: How to Offer a Safer Mobile Banking Experience

Stewart Bowling
Editor, Growth Content
Stewart Bowling is editor of Growth Content at Arizent.
Bank technology Community banking Commercial banking Banking Digital banking Credit unions Consumer banking Mobile banking Cryptocurrency
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