Hoosier Banker 25 Prediction 8: There will be a significant increase in Subchapter S institutions. Reality: This prediction also proved to be accurate. A significant number of community banks in the U.S. are in Subchapter S. Notwithstanding the Tax Cuts and Jobs Act under the Trump administration, Sub S is still the way to go for community banks. Prediction 9: One-stop shopping will be common in community banking. Reality: This has not proven to be totally accurate. Most community bank customers maintain multiple relationships with brokers, banks, fintechs and others. Prediction 10: Community bank trade associations will consolidate. Reality: This prediction was accurate, and the Indiana Bankers Association’s mergers with the Indiana League of Savings Institutions (year 2000) and the Community Bankers of Indiana (2006) is an indication of that trend. Future Predictions So what will the future look like 20 years from now? With help from Chairman of the Federal Deposit Insurance Corp., Jelena McWilliams, and a speech she gave at the Future of Banking Conference in October, I predict the following: • Prediction 1: To thrive in the future, as community bankers we must be willing to identify and adapt to emerging trends. Most of these trends will be in the technology area, but not all. Many of us suffer from core processor frustration in the technology area, and we need to get this fixed. • Prediction 2: We need to continue to focus on innovation and how and why products and services are delivered to our customers. We also, for the future, must marry high-touch – which will still be a critical aspect of community banking in the future – with high-tech (however that will be defined 20 years from now). • Prediction 3: It will be critical to focus on and understand the customer experience. If customers want to interact with the bank only digitally, then we need to provide that ability both on the deposit and loan sides. Again, marrying technology with high-touch to address problems is what is going to be successful for community banks in the future. • Prediction 4: Also to be successful in the future, we must be able to harness the STAFF CELEBRATION Congratulations to Eric J. Augustus, Indiana Bankers Association, who was married last fall to Madolyn L. Howe. Eric and Maddie were united in marriage on Nov. 9 at a wedding venue in Carmel. Eric joined the IBA in 2018 and serves as vice president-government relations. Maddie is senior manager, engagement at United Way of Central Indiana, which she joined in 2015. The newlyweds enjoy golf, outdoor activities and caring for their rescue dogs, Aggie and Chloe. The IBA wishes them many years of happiness. HB data we currently have available and will have available in the future. Banks are repositories of all kinds of financial data. Most of us have no clue how to harness that or mine it for purposes of improving the customer experience and the stickiness of the customer to the bank. It will be critical over the next 20 years that we understand how this works. As FDIC Chairman McWilliams recently stated: “Data is the new capital.” • Prediction 5: It will be incredibly important to harness the benefits of artificial intelligence (AI) and machine learning (ML). Both can help banks in numerous ways. • Prediction 6: To be successful, community banks will need to take advantage of the massive wealth transfer in the coming decades. As the population continues to age, the younger generation continues to mature, and banks continue to be successful, there is a spot for community banking in the future. We must play to our strengths, including high-touch service, and provide the technology piece and the customer experience that customers desire. HB
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