Odyssey 2022: Financial shifts continue

If you’re like countless others, you’ve grown weary of hearing terms like ‘unprecedented’, ‘pandemic’, and ‘the new norm’. Let’s face it, we were all thrust into a fight we hadn’t trained for, and we got knocked down in round one – 2020. Round two – radical and reactionary transformation – charged at us all through 2021. Now, we know our opponent and round three is ours for the taking. This past year demonstrated the industry’s resilience and adaptability, but it was merely groundwork for the changes we can anticipate in the new year.

The landscape to which we had become accustomed shifted right beneath our feet. With evolving consumer preferences, consolidations, and evolving regulatory environment, financial institutions have had to be ready for change almost daily. While these global conditions further accelerated changes already in the works, they created a dire pivotal point requiring leaders to reassess priorities and adapt to this dynamic reality. Even in the new year, we must be quickly decisive and light of foot. One might even say “float like a butterfly, sting like a bee”.

Taking the lead to influence global financial change doesn’t happen overnight. But financial institutions can alter the trajectory of these changes by not only acting when opportunities present but creating the opportunities themselves.

Tackling Talent for the Win

Culture and brand matter more now than ever. Financial institutions will need to focus their efforts to retain existing employees and attract new talent. The employment trends activated by the pandemic aren’t going away. In fact, they’ll become more prevalent and continue to evolve and create uncharted challenges for the banking industry.

But change means opportunity, right? It certainly can. It will become imperative for financial institutions to continue to be agile and adaptable in embracing a constantly evolving landscape to drive continued growth. Business models will have to adjust to find top talent, and that may mean hiring outside of their geographical areas and offering greater flexibility in working from…anywhere.

Further, the type of talent financial institutions will be looking for will likely also see a shift. In this increasingly technology-focused landscape, banks and financial institutions may be looking outside of traditional financial experience and more toward candidates with comparable tech skills or aptitude.

Three Influences Calling the Shots

1. Choosing a financial institution involves much more than proximal convenience these days. Technology has allowed for new networking that has crumbled geographic borders. The decisions financial institutions will need to navigate in adopting, integrating, or creating new technologies that meet the specific needs of their consumers will be challenging.
2. The market will see a push of more capital toward product advancements and partnerships and will continue to consolidate to manage the increasing costs of tech investments and the associated regulatory requirements.
3. Deeply rooted banking trends will explore ways to break through new layers of financial services. Financial institutions and fintech mergers and acquisitions have already started on a path for growth in 2021. Take fintechs acquiring small banks for instance, a trend that is likely to continue as they look to become a new contender in the ring by expanding their offerings.

In 2022, we can expect to see continued consolidation. Scalability will be critical for companies to navigate changing regulatory landscapes, recruit top talent, and continue to make significant investments in digital infrastructure and new technologies.