Despite an uncertain economy, the state of banking is full of hope with nearly every bank expecting to grow in 2023, according to Wipfli survey

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Jan 19, 2023, 08:00 ET

New report indicates to achieve their growth, the almost 250 banks surveyed are focused on closing the talent gap, improving digital engagement, and creating new revenue streams

A separate report on the state of credit unions shows they are heading into 2023 with confidence and are planning to grow this year as well

MILWAUKEE, Jan. 19, 2023 /PRNewswire/ -- Wipfli LLP (Wipfli), a top 20 accounting and advisory firm, today published a new report based on a survey of almost 250 banks to better understand their top concerns and how financial institutions are navigating current economic conditions, the national labor shortage and digital engagement. Despite a gloomy and uncertain economy, State of the Banking Industry Report, Research and outlook for 2023 is full of hope. Nearly every bank surveyed expects to grow in the next 12 months, with 70 percent of banks saying they will grow five percent or more. Banks with more than $3 billion in assets –categorized as regional banks – reported even higher confidence, with 94 percent saying they will grow five percent or more this year.

In order to achieve that growth, banks stated they're tackling strategic priorities like closing the talent gap (which is their No. 1 priority), improving digital engagement, and creating new revenue streams. They're also pursuing digital transformation projects to reduce costs and their reliance on human labor.

"Adding new revenue streams while improving engagement are only part of the equation. Current economic conditions are requiring banks to cut costs and increase efficiency," said Anna Kooi, national financial services leader at Wipfli. "Our research shows banks are having the hardest time filling front-line, commercial and retail roles, while larger banks are also struggling to find digital and IT workers. To fill the gap, banks are increasing wages, benefits and perks, and creating career paths for employees. 2023 is the year of the people plan."

To meet customers' digital banking needs, more than half of banks introduced instant payments services in the past three years. Another 47 percent added automated investing or robo-advisory services, which helps expand investment and wealth advisory services to the mass market.

"Twenty percent of consumers use at least one next-generation payment method," commented Kooi. "This shift in consumer payment preferences puts revenue streams at risk for banks."

In a separate report issued by Wipfli, State of the Credit Union Industry Report, Research and outlook 2023, the nearly 70 credit unions surveyed indicated they headed into 2023 with confidence. Most are planning to grow over the next 12 months, 81 percent think they will grow five percent or more in the next year and 95 percent are planning to acquire another financial institution.

Credit unions said improving digital member engagement is their top strategic priority for the New Year, followed by talent management, creating new revenue streams and pursuing digital efficiencies.

"Credit unions need seamless and simple digital experiences, along with competitive financial services, to attract and serve younger members," added Kooi. "With ambitious growth plans, credit unions need to aggressively address the talent gap and digital transformation. In addition, credit union leaders need to understand all the risks associated with an investment, including environmental and social factors. Investments and strategies that aren't in sync with the market won't perform well. ESG can steer credit unions toward better, longer-term decisions."

For the State of Banking report, which can be downloaded at https://www.wipfli.com/industries/financial-institutions/state-of-banking-report-2023, Wipfli collected responses from 249 financial institutions across 39 states. Of the institutions surveyed, 29 percent had assets under $500 million, 45 percent had assets between $500 million and $3 billion, and 28 percent were over $3 billion.

The State of Credit Unions report surveyed 69 credit union leaders in 27 states. That report can be downloaded here: https://www.wipfli.com/industries/financial-institutions/state-of-the-credit-union-2023.

About Wipfli

With more than 70,000 clients and approximately 3,100 associates, Wipfli ranks among the largest accounting and advisory firms in the nation. We bring integrated solutions to help our clients turn data into insights, optimize workflows, increase margins and transform through digital innovation.

Media contact:
Scott Cianciulli
The Plunkett Group
(212) 739-6753
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SOURCE Wipfli LLP