Inflection points – like record-breaking inflation, skyrocketing interest rates, and reduced loan demand – have created challenges for banks. Like any change, inflection points can create fear, uncertainty, and doubt. But they can also uncover new opportunities for growth, innovation, and success.
Jack Henry™ conducted a survey of 118 financial institution CEOs to identify strategic priorities in 2023 and 2024. The result is the 2023 Strategic Priorities Benchmark Study, which looks at industry trends and provides a peer benchmark so your bank can develop a strategic plan, remain relevant, and capitalize on new opportunities as they emerge.
According to the study, growing deposits, growing loans, and increasing operational efficiency are among the top strategic priorities for bank CEOs over the next two years.
Growing Deposits: Difficult, Not Impossible
Inflation has caused interest rates to increase, loan demand to decrease, and deposits to decline. There’s now an urgency for banks to strengthen existing deposit relationships and grow deposits. But in addition to being an important strategic priority, growing deposits is also one of the most difficult to achieve.
The best deposit strategies are targeted, tiered, segmented, and strategic, so to attract and retain customers, offer innovative deposit products and personalized services. Leverage technology solutions and digital platforms to streamline account opening processes, offer convenient mobile banking options, and create personalized experiences that resonate with your customers.
Growing Loans: Be Proactive, Not Reactive
Soaring interest rates, rising inflation, and a looming recession impacted both loan demand and borrowers’ ability to repay. Loan momentum has slowed, but delinquencies and charge-offs have risen.
Capture market share by proactively tailoring your loan offerings to specific markets and segments instead of just reacting to economic conditions. Offer competitive interest rates, flexible loan terms, and quick loan approval processes. Implement lending strategies specific to your borrowers’ lifestyles, and target niche segments by meeting borrowers where they are.
Expand your share of small and medium-sized business (SMB) lending by leveraging digital-first, relationship banking. Rising rates make it harder for SMBs to secure loans, so use your knowledge of the markets your SMBs serve to mitigate credit risk and offer more attractive financing.
Increasing Operational Efficiency: Streamline & Modernize
Banks are investing in technology to streamline operations, automate manual processes, and reduce costs to drive growth and customer satisfaction. If increasing operational efficiency is your goal, get proficient with using analytics tools, and streamline your back-office processes.
You’ll also need to modernize your core and implement cloud-based solutions. With a modern, cloud-native tech stack, you’ll reap the benefits of continuous innovation and deployment, improving speed to market and reducing the resources required to make changes.
The Strategic Priorities Benchmark Study: A Roadmap for Success
Understanding the strategic plans and priorities of your peers can help you develop and refine your own strategy, equipping you to innovate faster, close strategic gaps, and capture market share.
Download the full 2023 Strategic Priorities Benchmark Study. This valuable tool for strategic planning and decision-making has insights to help you leverage technology solutions, align your near- and long-term direction with industry trends and best practices, identify emerging opportunities, and innovate in the areas that have the greatest impact on your growth, success, and ability to best serve your customers and your community.