Many businesses that have struggled through the past year will be pursuing opportunities to expand their markets and increase productivity through equipment upgrades and additions in products and services. The post-pandemic market will open new avenues of growth for many businesses and those banks positioned to grow with their customers.
Pub. 11 2021 Issue 2
Just in case you stepped away from your computer for a few minutes, marketing technology or MarTech, describes the software and technology used to attract and retain customers. There’s been a lot of talk about it, and rightfully so. According to HubSpot’s recent article, “What Marketing Leaders are Investing in This Year,” 60% of marketers indicated that they are set to increase their marketing technology spending in the next 12 months. The reason, of course, is that investments in marketing technology are the solution du jour when it comes to a financial institution’s ability to, as HubSpot puts it, “retain and delight their audiences and react with speed when necessary. And the options are vast. As of 2020, there were 8,000 different MarTech tools to choose from, ranging from data analytics platforms to CRMs, to internal team collaboration tools.”
The term “fintech” is a portmanteau of the terms “financial” and “technology.” It is generally used to refer to innovative information technologies in the financial services industry. The development of highly sophisticated information-technology algorithms over the past several decades has enabled the creation of a new generation of products and services that enhance convenience, speed and accuracy; and that can potentially destabilize entire industries — and create new ones. The Uber ride-hailing app is a good example of this. Applying these relatively new algorithm-based information technologies to the creation of innovative products and services in the financial services sector gave birth to the nascent “fintech industry.”
In addition to all of the everyday risks banks and credit unions need to guard against, the COVID-19 pandemic has resulted in a significant increase in the number of ATM thefts across the country. The spike hasn’t been surprising due to a number of factors, but the costs and damage resulting from these attacks are often considerable. Fortunately, there are steps banks and credit unions can take to help prevent becoming a victim of ATM theft.
On March 9, 2020, the Federal Deposit Insurance Corporation (FDIC) issued guidance encouraging financial institutions to assist customers and communities affected by COVID-19. With the Coronavirus Aid, Relief and Economic Security (CARES) Act, many banks were faced with their own set of challenges. During this time, many banks took steps to assist consumers, including allowing loan modifications with no fees, waiving fees on accounts and offering in-home banking services. Many were also participating in providing Paycheck Protection Program (PPP) loans to small businesses. Because of these accommodations, many banks struggled with high volumes of COVID-related mortgage requests and questions from customers and PPP loans. Banks were overcoming these overwhelming volumes while also maintaining their efforts to keep the physical locations of the banks safe for both customers and the employees. Through these difficult times, financial institutions created and revised policies and procedures to adjust and provide excellent service to customers.
The financial press is full of news about CECL’s effect on loans, as well as how the effects of the coronavirus will affect CECL’s implementation. Yet, community banks will need to understand and strategize around the impact the new standard will have on their institution’s investment securities. These will need new accounting treatment as well. Different types of bank investment will require different accounting. Here are some considerations.
The 2021 legislative session has been unlike any others in recent memory. For one, lingering effects of the pandemic have required new safety procedures and kept public participation mostly digital. Pent-up demand from the COVID-shortened 2020 session has led to a flurry of activity and a large number of budget requests. But what has truly defined this session so far has been the mountain of cash legislators have to play with and how they decide to spend, cut or save it.
At the end of May, the government’s Paycheck Protection Program is scheduled to come to a close. If Congress does not extend the program, we can expect the “Monday morning quarterbacking” about the program’s impact on the economy, its design and implementation, and its ultimate cost to begin. Those are appropriate questions to ask as we consider the lessons learned from the nation’s response to the coronavirus pandemic.