As community and regional banks navigate 2023 and approach 2024, they’re setting their sights on critical priorities to chart their strategic direction – with a keen focus on:
• Growing deposits
• Growing loans
• Retaining talent
Jack Henry’s 2023 Strategic Priorities Benchmark Study found that 79% of financial institution CEOs surveyed plan to increase technology spend over the next two years, with a majority allocating investments between 6% and 10%. Specifically, banks cited growing deposits (52%) and growing loans (50%) as top strategic priorities for the next two years; and 45% reported talent acquisition and retention as their top concern.
Understanding the Study
The mission of the Strategic Priorities Benchmark Study is to help banks see around corners and strengthen relationships with the people and businesses they serve. By understanding their peers’ plans and priorities, banks can innovate faster, close strategic gaps, and capture market share amid ongoing disruption.
Strategically Grow Deposits
In response to Silicon Valley Bank’s collapse and Apple Card’s new high-yield savings account, banks are urgently focusing on strengthening deposit relationships and acquiring new accountholders. Targeted, tiered, and segmented deposit strategies are proving effective, with high-performing institutions exploring creative solutions like re-financing of CDs or hybrid bundles to offer attractive rates.
Expand Small- and Medium-Sized Business (SMB) Lending
With non-interest income under pressure and regulatory scrutiny on OD/NSF fees, banks who are leveraging digital-first, relationship-based banking will be the ones to expand and monetize SMB lending. Additionally, rising rates pose challenges for SMBs in securing loans, creating an opportunity for banks to reclaim market share lost to fintechs and neo-banks.
Acquire (and Keep) Talent
The tightening fintech market due to recession fears and rising interest rates has resulted in mass tech layoffs, providing banks with a unique opportunity to acquire tech talent. This talent pool is instrumental in driving ongoing digital transformation, pursuing niche strategies, and enhancing data analytics and cloud management capabilities.
As the financial landscape evolves, community and regional banks are actively adapting their strategies to seize new opportunities and stay ahead of customer demands. Embracing technology, cultivating talent, and prioritizing customer-centric solutions will be key to thriving in the rapidly changing financial ecosystem of 2023 and beyond.
Read the 2023 Strategic Priorities Benchmark Study for more on how you can see around corners, remain relevant, and capitalize on new opportunities as they emerge. Start strategizing today.