To find out how bankers will confront challenges associated with pandemic-induced digital acceleration, cybersecurity, regulatory changes and more, CSI surveyed banking executives from across the nation about their strategies and priorities for 2022. The results of the annual survey are outlined in an executive report and highlight the opportunities — and risks — inherent in today’s banking environment.
Here are the top five issues that bankers selected as most likely to affect the industry in 2022, along with strategic recommendations for your institution to consider.
1. Cybersecurity Threats Loom Large
With over 85% of banking executives across asset sizes reporting an increase in digital usage at their institution, cybersecurity concerns form an ever-present backdrop. As a result, it should come as little surprise that 26% of respondents selected cybersecurity as the issue they believe will most affect the financial industry in 2022.
Three converging circumstances make cybersecurity increasingly difficult for financial institutions:
- As digital usage increases, more systems and users are vulnerable to cybersecurity threats.
- As more cyberattacks occur, customers are becoming increasingly numb to the risks.
- As institutions enhance their cybersecurity efforts, cybercriminals up the ante with harder-to-detect methodologies.
Some steps, such as routine vulnerability scanning and penetration testing, are no-brainers to enhance your bank’s cybersecurity posture. Cybersecurity training is another strategy to prioritize, as banks benefit significantly from an informed customer base. Energize your customers with campaigns, videos and gamification to reinforce the importance of good cyber hygiene.
2. Recruiting and Retaining Bank Employees
In a massive shift from previous years’ results, recruiting and retaining employees rose to second in bankers’ list of pressing issues, taking 21% of the vote. Organizations across industries are feeling the effects of the Great Resignation, and banking appears to be no exception.
With the rise of remote work, prospective employees are now seeking opportunities outside of their geographic region. Larger companies in bigger cities can hire from anywhere and offer salaries far exceeding living costs in smaller communities. This trend causes a unique problem for financial institutions, as turnover leads to a loss of expertise and potentially creates risk from newer, untrained staff.
Your bank should actively seek out new talent while supporting remote work when appropriate to combat these trends. As the talent pool becomes increasingly competitive, consider utilizing trusted ‘as-a-service’ product offerings and outsourced expertise.
Your bank should actively seek out new talent while supporting remote work when appropriate to combat these trends. As the talent pool becomes increasingly competitive, consider utilizing trusted ‘as-a-service’ product offerings and outsourced expertise. For instance, a managed services partner can help optimize your IT infrastructure if IT professionals are unavailable or limited.
3. Navigating the Regulatory Landscape
Ranking third with 14% of the vote, regulatory change remains of constant significance to financial institutions, especially given a relatively new administration and a chance of new sanctions. While there is a host of regulatory issues to consider, several of which are outlined in the executive report, bankers should continue to stay on top of data privacy. Beyond GDPR, more states are adding privacy regulations, and institutions must take a holistic approach to data privacy, including biometric data.
Additionally, banks must realize that come 2023, there are no more what-ifs regarding CECL. If you aren’t already doing so, running your CECL platform parallel to your ALLL platform helps you make strategic decisions about which CECL solution is best for your institution and how it will affect your capital.
4. Meeting Customer Expectations
Meeting customer expectations fell to fourth in bankers’ priorities this year, but that doesn’t mean this issue is any less important. Digital is now the primary way many customers interact with your bank, and that trend will continue.
Even if you’re not interacting with customers at your branch at all, you should be able to promote the right products and deepen customer relationships. Digitalizing the customer experience and backend processes make serving customers far simpler.
If you’re optimizing existing digital solutions or determining gaps in the populations you serve, data makes all the difference. Whether by CRM or other data and analytics dashboards, analyzing customer behavioral data helps you make informed decisions relating to which markets your bank is serving well and what changes you need to make.
5. The Rise of APIs and Open Banking
Open banking APIs are on the minds of financial institutions everywhere as a base technology that enables such game-changes as banking as a service (BaaS), platform banking and embedded banking. It’s a simple idea — using open APIs enables third-party developers to build applications and services around your institution.
Open banking APIs offer a host of benefits, including optimization of existing systems, integration with new technologies and opening new revenue streams through platform banking. Further, open banking rounds all banking data and capabilities to give a complete view of customers, driving efficiency and enabling better tools. This includes digital banking, connectivity, workflow integration and even payments.
Get a Comprehensive Look at Bankers’ Top Priorities for 2022
Download the 2022 Banking Priorities Executive Report to unpack the complete survey results — including bankers’ insight on their past performance and technological investments — and receive strategic recommendations for the year ahead.
Shane Ferrell is vice president of Product Strategy at CSI.
