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SRM Perspectives on Key Industry Trends

Paul Davis

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Fintech is Redefining Community Banking

Posted by Paul Davis on May 2, 2022 9:30:00 AM

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Fintech is helping a growing number of banks and credit unions reconfigure the communities they serve.

Historically, financial institutions have focused on clients based on geography, be that a neighborhood or city for banks or a local company or industry for credit union membership. Over time, those boundaries became more fluid as banks entered new markets and credit unions expanded their fields of membership.

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Topics: Fintech, Vendor Contract Negotiation, Cryptocurrency, Bank Vendor Management, Credit Union Vendor Management, Segmentation, Banking-as-a-Service, BaaS

Credit Union Buyers, Regulatory Delays, and More: Bank M&A Trends to Watch

Posted by Paul Davis on Mar 28, 2022 11:21:12 AM

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As summer approaches, bank consolidation has been steady but not as brisk as many thought.

 

There have been 37 transactions announced by March 18, 2022. If this pace continues, it would be about 25% below last year, though many of 2021's deals were in the works before the pandemic. As with many other business transactions, they were shelved as Covid-19 took hold.

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Topics: Vendor Contract Negotiation, Bank Vendor Management, Mergers & Acquisitions, Expense Management, Credit Unions

Key Takeaways from CUNA GAC: Challenging Times Ahead

Posted by Paul Davis on Mar 8, 2022 9:16:42 AM

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The CUNA Governmental Affairs Conference was in-person for the first time in three years, giving many credit union executives a long-overdue chance to have face-to-face meetings.

 

SRM made the most of the week, engaging with scores of executives, getting a sense of their challenges and opportunities, and lining up discussions to assist in crafting strategies and finding solutions for both.

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Topics: Digital Banking, Vendor Contract Management, Cryptocurrency, Credit Union Vendor Management, Cryptocurrency for Banks and Credit Unions, Loan Growth, Deposits, Overdraft

Merger Scrutiny, Overdraft Fees & More: Banking Regulation in 2022

Posted by Paul Davis on Feb 8, 2022 11:47:00 AM

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Financial institutions should brace for substantial regulatory change in the year ahead.

Turnover at the top of several federal agencies, including the Consumer Financial Protection Bureau (CFPB), the Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corp. (FDIC), foreshadows more scrutiny for FIs.

Everything seems to be on the table, including timelines for implementing the Current Expected Credit Loss (CECL) accounting standard, data privacy, and Bank Secrecy Act compliance.

There are, however, several areas that we believe merit the most attention in the coming months.

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Topics: Vendor management, Cryptocurrency, Interchange, Regulations, Mergers & Acquisitions, Overdraft

How a CBDC Could Disrupt the US Financial System

Posted by Paul Davis on Jan 27, 2022 9:30:00 AM

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Creating a US central bank digital currency (CBDC) could have several benefits; however, it would also cause a plethora of systemic challenges for the existing financial system.

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Topics: Vendor management, Cryptocurrency, CBDC, Federal Reserve, Blockchain

How Financial Institutions Are Trying to Appeal to Younger Consumers

Posted by Paul Davis on Jan 18, 2022 9:30:00 AM

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Financial institutions (FIs) of all sizes struggle to recruit and retain younger employees and customers – a challenge exacerbated by the rise of neobanks that offer enhanced experiences, streamlined processes, and faster decisions.

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Topics: Payments, Vendor Contract Negotiation, Bank Vendor Management, Credit Union Vendor Management, Rewards Programs, Gen Z

Identifying Revenue Opportunities in 2022

Posted by Paul Davis on Dec 1, 2021 9:30:00 AM

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It will be difficult for financial institutions to boost revenue in 2022 – many will need to be more innovative than ever to add customers, book loans, and bring in fees.

Interest rates should remain low next year, and competition will intensify as loan demand returns. Customers’ shifting preference for digital channels will require tech investments that will further pinch bottom lines.

Financial institutions are looking at niche businesses, acquiring loan portfolios, and creative revenue strategies to offset those pressures. Here’s a look at some tactics being employed.

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Topics: Fintech, Bank Vendor Management, Credit Union Vendor Management, Buy Now Pay Later, Cannabis Banking, Revenue

What’s Driving the ICBA’s Pivot with Credit Unions Buying Banks

Posted by Paul Davis on Nov 2, 2021 9:30:00 AM

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Although credit unions have been acquiring banks for nearly 20 years, the banking industry has recently intensified its efforts to slow the pace of activity. The pushback is partially due to the aggregate number of credit unions buying banks – roughly 100 have taken place since 2003 – and that the purchases are, on average, becoming more significant.

A case in point is Midwest Community Bank in Freeport, Illinois, which recently became the 12th bank to agree to be sold to a credit union this year. Overall, the credit union industry could eclipse the all-time high of 16 bank acquisitions announced in 2019.

The Independent Community Bankers of America (ICBA), which has objected to these transactions for years (largely citing the tax-exempt status of credit unions), sent a letter to Treasury Secretary Janet Yellen in July recommending that the federal government assess an exit fee on credit unions when they buy banks.

This proposal represents an interesting shift for the ICBA, one that we will look at more closely below.

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Topics: Vendor Contract Negotiation, Bank Vendor Management, Credit Union Vendor Management

Tech upgrades are coming – but at what cost?

Posted by Paul Davis on Oct 27, 2021 9:00:00 AM

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Despite concerns about upfront costs, a growing number of community banks are preparing to implement technological upgrades, such as online loan closings and automated underwriting.

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Topics: Fintech, Automation, Bank Vendor Management, Credit Union Vendor Management

The Four Whys Driving More Buys | Excess Deposit Strategies Add to M&A Trend

Posted by Paul Davis on Aug 24, 2021 9:30:00 AM

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In response to the banking industry’s recent influx of deposits, several recent bank acquisitions show how some banks are responding to the pressure of putting liquidity to work.

Midsize banks like Truist Financial, Fifth Third Bancorp, Regions Financial, and some community banks have announced acquisitions where they plan to hold onto loans that the sellers would typically roll off the balance sheet.

Their objective? To redeploy billions of dollars in deposits held by the acquirers, shore up net interest margins, and boost returns.

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Topics: Lending Strategy, Mergers & Acquisitions

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