Banking is changing up in 2018, and that’s mostly good news for the 38,000 Delawareans who work in the sector. We talked to thought leaders in the sector about what trends they anticipate for the year ahead.
There are variables, but mostly good ones
A new Fed chair takes over in February. There’s a new, more constructive mood around regulation. Add to that the new tax law, which is expected to spur investment. And interest rates. PNC economists are forecasting two or three quarter-point rate hikes this year.
Two big changes for Delaware
Bruce Colbourn, PNC market executive for Delaware, and Mark Turner, WSFS CEO, both said last year’s Coastal Zone Act changes and Gov. John Carney’s creation of a public-private partnership to bring economic development to Delaware will reap benefits in 2018. “It’s almost as if we’re on the runway and we see nothing but green lights ahead of us,” Colbourn said.
The fundamentals are good
Turner said Delaware’s economy is picking up and its three Cs — chemicals, chickens and credit cards — are growing. In addition, new entities like Zip Code Wilmington and Leading Edge Ventures and co-working
sites are creating a new collaborative innovation ecosystem.
Regulatory relief is on the way
The move toward more constructive regulation of banks will reduce costs, predicted Turner, who added that complying with Dodd-Frank regulations alone accounts for a stunning 4 percent of WSFS’ total costs.
The new tax law is a boon to banks
“It will improve the cash flow in the economy, drive the GDP higher and drive jobs higher,” Turner said.
Colbourn said, “It’s already beginning to fuel optimism among business owners about the prospects for 2018.”
Unknowns could be negatives
Unpredictable events could upset the best-laid plans. Who can predict geopolitical shocks like terrorism and business interruptions such as cybersecurity lapses, which Turner called “the knot in the stomach of every executive.”
Banks spend on fintech and cybersecurity
Sarah A. Long, president of the Delaware Bankers Association, said the big issues for her members at the year’s start are taxes, regulatory relief, fintech solutions and cybersecurity.
Fintech solutions are high on most banks’ to-do lists because younger bank customers seek out institutions that make money matters easier and more secure.
Knowing that, Delaware banks are spending on innovation and on convenience and on cybersecurity defenses. Bankers say they are trying to gauge how much tech to deliver at one time. They want to keep up with customers’ expectations, but they don’t want to overwhelm them.
The newest branches look more like comfy living rooms than stiff offices. There are few barriers. No one sits and waits for a loan officer or an account specialist, because every employee is trained to do every job. Bankers are training staffers more thoroughly so they because problem solvers who can quickly and competently answer customers’ needs in a face-to-face encounter.
Of course, many customers will never even enter a bank in 2018, because new mobile payment solutions allow them to do most banking from their phones.