Answering the question about the future of community banking has almost become a rhetorical exercise, as there are many variables but no clear answer. There are, however, several long-term trends that have been impacting this industry from which we can draw from in our attempt: • We have a dynamic economy but are operating in inflationary and rising-interest rate environments we have not experienced in over a decade. There are global issues that flow through our economy in positive and negative ways. • Technology has been changing financial services and consumer behavior for decades. This has only accelerated, increasing opportunities, altering risk profiles and changing the competitive landscape. • Banking is heavily regulated with mounting expectations and requirements. Efforts at regulatory relief have paled in comparison to new requirements and enhanced regulatory scrutiny. • A societal shift in attitudes about “work” is challenging a relationship business model and the idea of the bank as a local destination. Community banks pre-date the founding of the United States. As banks evolved to meet the needs of a changing nation, they demonstrated their resiliency and criticality to the economy. The industry has shrunk, but 4,500 is still a significant number of banks By Michael L. Stevens, President & CEO Graduate School of Banking at Colorado, ICBC Associate Member Beyond Our Line of Sight, But Not Our Imagination INDEPENDENT REPORT | 23
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