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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.

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 12^th 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.

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.

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.

In recent years, challenger banks, neobanks, and other fintech startups have intensified their efforts to compete as financial services providers. Now, regulators have renewed interest in shifting the odds in their favor.

By obtaining a new specialized charter through the Office of the Comptroller of the Currency (OCC), new competitors may gain strategic advantages over more conventional banks and credit unions.

Here is a closer look at some legal and regulatory developments which could determine just how entrenched fintechs will become in the payments system – and how competitive they can be with core banking products and services.

SRM recently released its list of 2021 midyear trends that banks and credit unions should monitor during the second half of this year. Naturally, these developments didn’t appear out of thin air – our top-performing project managers and experts make it their business to examine and spotlight those topics which carry the greatest strategic impact for payments and financial services.

In this post, SRM shines a light on some big acts we’ve long anticipated will draw attention by the millions, billions, and trillions.

Financial Institutions (FIs) have long had a curiosity regarding fintech.

There were concerns that these digital disruptors would create more competition for traditional financial services providers (without as much regulatory oversight), but banks and startups are starting to embrace opportunities to collaborate.

Conversations about partnerships between FIs and fintech intensified in the wake of the coronavirus pandemic, as scores of consumers and businesses became digital converts and there was a greater need to make day-to-day tasks easier (and safer) for those customers.