Why Staffing, Tech Upgrades Matter with 2023 Budgets

Posted by Paul Davis on Nov 9, 2022 11:14:00 AM


Budgeting season for 2023 is slowly wrapping up as banks and credit unions forecast revenue opportunities and looming expenses.


Financial institutions are considering future interest rate hikes, regulatory oversight, and increasing personnel and operational costs, among other things. The bigger picture is that client retention and recruitment will be critical to long-term success – invest now to ensure you’re ready to compete. 

At SRM, we urge banks and credit unions to take a hard look at third-party contracts as they plan for the new year. There are also other considerations that should be made as you prepare for the future.


This year, we polled some of our experts, asking them to highlight areas that merit extra attention. Here are some highlights from their responses.

There’s a War for Talent


Mark Sievewright stresses that FIs need to plan to retain and attract producers at a time when there is upward pressure on wages.

“The fundamentals of the business require financial firms to be successful in retaining and attracting the quality and quantity of staff needed,” he says. “It is essential to focus on culture and employee engagement programs.”

There should be a focus on professional development and processes to provide career paths for employees. There is a need to maximize the employee experience and invest in employee well-being programs.

AI Regains Popularity

AI and automation projects, which were placed on the back burner during the earliest days of the pandemic, have regained interest in the last year.

The pandemic has made cutting costs and improving convenience critical to FIs, Connor Heaton observes. Staffing challenges and an increase in remote banking have also led many banks and credit unions to revisit investments in AI after spending time on the sidelines.

“The has been an increased emphasis on voice AI at contact centers as FIs look to offload routine queries,” he says. “As customer demographics continue to shift, quality 24/7 self-service options will increasingly be table stakes, and digital modernization will become an existential necessity.”

Digital Assets Will Go Mainstream


Recent developments in Washington portend that digital assets, including cryptocurrencies, will eventually be subject to sweeping regulation, which should provide more confidence for consumers and FIs to take the plunge.

Banks and credit unions should budget for due diligence, even if there are no immediate plans to offer digital assets services to customers and members, Patti Wubbels stresses.

“FIs will likely need to pivot on some infrastructure in the not-so-distant future,” she says. “Digital mapping is a good idea right now to set up the capabilities for adding technology for now and the next few years to come.”

 Consider Adding ITMs

While the pace has slowed from the earliest months of the pandemic, banks and credit unions continue to right-size branch networks by closing and consolidating offices.

Simon Rose notes that FIs still need to meet the needs of specific customer segments while managing complex, high-value transactions.

“We believe interactive teller machines deserve consideration as an option to close the gap created by thinning branch networks,” he opines.

According to the American Bankers Association, the typical ITM can cost $55,000 to $80,000, excluding a one-time infrastructure cost ranging from $250,000 to $500,000. Yet, they have the potential to connect with communities and cover their initial cost outlay many times over – if effectively marketed.

 Lay a Fintech Foundation

FIs don’t necessarily have to dive into fintech in 2023 – but they certainly need to understand the market.

Allocate some funds to research what strategies are available, meet with providers, and assess the evolving regulatory climate, Paul Davis says. Discuss with your board whether it makes sense to collaborate with tech or pursue investments.

“Customers want seamless experiences,” he says. “A solid fintech strategy could lead to lower costs and better client retention over the long term.”

Pressure to rein in overdraft and nonsufficient funds fees will pinch revenue. Finding new ways to deliver products and services – at a lower cost – will be a critical offset.

A longer-term consideration is the metaverse, which will rely heavily on cryptocurrency for transactions. Education and due diligence should be considered now to be better prepared for the future.

 The Bottom Line

 Banks and credit unions have a laundry list of considerations during the budgeting process. The key is to identify areas where you can retain and attract customers/members and spread out expenses as much as possible.

This will require an upfront investment in fintech, ITMs, and AI. It is critical to understand the long-term ROI from those expenditures and to vet the third parties responsible for implementing your long-term vision. SRM can help you assess your needs, identify the best matches in terms of vendors, and get your plan off on the right foot.

Topics: Fintech, Automation, AI, Digital Assets, customer retention, ITM, Staffing

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