Key Highlights and Preview
The 2024 survey revealed a nuanced view of the challenges and opportunities that lie ahead in community banking. Noteworthy highlights of the following pages include:
The Banker’s Take on High Interest Rates
Community financial professionals feel that high interest rates will affect the industry most in 2024.
Thirty-five percent listed interest rates as the issue that will most affect the industry in 2024, more than any other issue tested.
Banks are deploying various approaches to deal with the associated challenges, including offering competitive rates on deposits, shifting investment strategies and tightening lending standards.
5.25 - 5.5%
Today’s Federal Interest Rate is the highest it’s been since the 2007-2008 financial crisis. It increased 100 basis point in 2023 alone, continuing increases since March 2022.
Source: The Federal Reserve7
How Banks are Improving Their Digital Experience
Although branch technologies are seeing a renewed investment, banks continue to concentrate more heavily on digital offerings to engage and attract customers.
- Financial professionals say that their bank will prioritize digital account opening more than other technologies.
- Moreover, digital wallets are the chief payment technology being prioritized this year.
216.8M
Banks’ continued investment in digital stems from steady increases in digital banking usage, with an anticipated 216.8 million digital banking users by 2025.
Source: Statista8
The Industry Takes Stock of Fraud and Risk Mitigation
Fraud ranked highly on bankers’ list of critical issues, with phishing risk a top area of focus surrounding fraud prevention.
- Financial professionals most commonly see fraud associated with cards, wire transfers, checks and phishing.
- However, only 15% of community banks feel that their phishing mitigation strategies are effective.
$8.8B
Fraud remains an ever-present threat, with the Federal Trade Commission estimating $8.8 billion in stolen funds throughout 2022 and many banks reporting exposure to fraud throughout 2023.
Source: FTC9
Where Bankers Stand on Artificial Intelligence (AI)
Although news cycles about generative artificial intelligence have bred discussion across industries, community bankers are tempering their excitement for its potential applications with caution.
- AI’s growth emerged as the top technology trend financial professionals expect to affect the industry in 2024.
- Most are interested in using AI for various business cases; however, three-quarters are also cautious.