While often unpredictable, there are certain themes and trends that leading experts in banking, credit unions, wealth management companies, investment companies and CPA firms have observed over the past several years.
As many of these professionals prepare to greet 2014 with the knowledge, wisdom and keen observations that come with such historical insights, they”ve offered to share what they”ve seen and discuss how it might shape the financial landscape over the next 12 months.
Some local leaders assert that customers will remain the trendsetters, driving banking, credit unions and other financial industries. Said Bartow Morgan Jr., CEO of BrandBank: “In this industry, we need to be continually asking ourselves, “what does the customer want?”” Morgan said that, above all, customers want convenience, and these days that means allowing the customer to have access to their financial information through apps on their smartphones. Features like remote deposit and apps that help the customer manage money are the present demand and could lead the way into the future.
Lin Hodges, president and CEO of Associated Credit Union, feels that emerging remote banking technology is “the new definition of convenience. People seem to want to bank electronically. A fairly large segment prefers it that way. It used to be convenience meant having a physical location at every corner. Now, the brick-and-mortar is not as common. You”re seeing a trend that moves away from that as banks and credit unions focus more on investing in technology.”
Local leaders also weighed in on the slow economic recovery of the nation as well as what business people and everyday citizens can do to plan for the road ahead. For instance, J. Jerri Hewett, certified financial planner with Wealth Horizon, believes the opportunity for more investment growth “is turning toward small- and mid-sized companies. International investing also shows some pockets of promise if you are willing to be patient.”
Patience could prove to be the common theme for the coming financial year: “(The economic outlook) is more positive than it”s been in the last five years,” Morgan said. “It”s warming up a little, but there are still many challenges ahead.”
Morgan said that the goal has always been, and always will be, “to create a good experience for the customer.” As CEO of BrandBank, a 105-year-old diversified financial services company based in Gwinnett, Morgan feels that any financial institution should always “try to make it easy for the customer to do business.”
Being customer driven might sound like a no-brainer to many, but it”s often the leading edge that can mean the difference in new business and no business for companies that operate within the financial realm and beyond.
“What I”m seeing today is…the number one driver of how you choose business and who you do business with is finding someone you can trust,” Hodges said. “Everybody is so busy today. Everybody”s time is so valuable. You go through life at warp speed, and excellent service is such a rare commodity now.”
Hodges encouraged Gwinnett Magazine readers to “really think about it for a second: How many times have you done business with someone, and you had such a great experience that you felt compelled to write a letter to the president of the company? That probably doesn”t happen often…but I get letters every day from people who tell me they”ve had a positive experience, and that”s the key.”
The New Definition of Convenience
“Whoever owns the phone will win,” Morgan said. “Everything is headed toward that, because that”s how the customer wants to interact. Customers love their smartphones, and banks have got to get on board, because that”s the direction of the entire industry.”
National surveys have shown that Americans continue to grow increasingly comfortable using smart phones for financial transactions, which represents a shift from several years ago when phones were used mostly to check account balances or locate brick-and-mortar locations. According to national phone industry estimates, about half of mobile phone users in the United States are using smartphones. More people are using apps, resulting in decreasing demand for face-to-face service at your local bank or credit union.
Hodges said a fairly large segment of customers indeed prefer to bank electronically, however “there”s only a small segment that want only electronic banking. They want both. If they have an issue, they want to be able to talk with somebody. They want problem resolution, not an automated voice saying “press one for this, press two for that.”” Added Hodges: “It”s challenging today, because you have to make a substantial investment in technology, but also maintain excellent member service standards.”
Hodges feels the economy is “no doubt getting stronger, and obviously there are going to be bumps in the road. The general trend, however, is leaning toward the positive.”
Certain signs of recovery have indeed surfaced. A high-ranking official with
Gwinnett County Government projects that tax digest dollars – one of the county”s main sources of revenue – will be on the up-tick in 2014, thanks to an increase in the number of building permits and development in Gwinnett County. Maria Woods, director of financial services, predicts a 2.4-percent increase ($182 million) over the 2013 numbers. In 2012, county staff predicted a 1.9-percent decrease in the tax digest.
“Now, we”re seeing that swing back the other way,” Woods said. “We”re seeing more building permits being issued,” she said. “We”re actually seeing new development… speaking strictly from the tax digest, our predictions are it”s going to be better in 2014.”
Based on her read of the current economic outlook, Wealth Horizon”s CFP J. Jerri Hewett feels that investors are better off now – and will likely be on into 2014 – than they were in the past several years. “At the present, the market, the S&P (Standard & Poor”s), is not far off its all time high of 1729.44 reached on September 18 this year,” Hewett said. “Depending on how much money you allocated to stocks since 2009 and 2010, you have some upside but the economy and the market do not necessarily move together.” Hewett added that she is “cautiously optimistic” about the growth and earnings of U.S. corporations.
The Road Ahead
Hodges said that consumers may be treading a little more carefully than they might have, say, five years ago, “but you don”t see quite the fear or uncertainty that we”ve seen in the last couple of years.”
Doug Foote, president and CEO of Georgia United Credit Union, said consumers are “going to be pensive about a lot of things that are going on at the national level.” He said that people who “are in stable jobs should look at all financial decisions like they normally would. People aren”t going to be running out next year to buy a bunch of extravagant things, but they”re still making purchases.”
Foote added that consumers should not be “leery” about normal purchases. “In fact, the way the market is right now, it”s a prime time to do it. You”ve got low interest rates, especially auto loans, and mortgage loans are still low. You can”t beat the rates you”re seeing these days.”