Top Takeaways From #AOBA23

Bank Director’s Acquire or Be Acquired Conference was a great way to kick off 2023 with some valuable insights into the banking industry. Here are my top takeaways from the event:

It’s All About Deposits

Since 2010, there has been a 15% shift in deposits from financial institutions under $10 billion to institutions over $100 billion. Taking a disciplined, data-driven approach to deposit retention and growth is the path to success and profitable growth.

A Focus on Near Term Opportunities

With an inverted yield curve, financial institutions are looking at the indicators of economic downturn and looking at ways to effectively manage risk while looking for pivots to leverage near-term opportunities. With uncertainty on the horizon, relying on lagging indicators like reported data (past delinquencies and missed payments or financials and tax returns) to assess risk is too slow and institutions must take a proactive approach to managing risk. An approach that leverages behavioral changes in your data about your clients like high line utilization, deposit increases or decreases, and stopping of direct deposits can tell you a lot about where you have risk and opportunity in your customer base.

Loan Pricing Strategy is Critical

With rate changes and a runoff of stimulus deposits, banks have to go back into deposit gathering mode to support their loan growth strategies with low cost funds. It’s important for financial institutions to have a small business lending strategy – especially when it comes to loan pricing. Institutions with sound loan pricing strategy that takes the entire client relationship into account are poised for more profitable growth.

Financial Institutions Need Technology

With disruption from "shadow banks" and fintechs coupled with digital adoption skyrocketing from the pandemic, financial institutions must invest in technology to not only claw back market share and grow, but to retain customers and talent. Institutions that have invested in technology like a loan origination system are positioned to win against the competition on all fronts.

Interested in learning how Baker Hill can help position your bank or credit union for success in 2023? Reach out to our team to start the conversation today.

Author Bio

Bryan Peckinpaugh has spent his entire career working in the financial services industry and the last 10+ years focused on business transformation. As SVP of Key Accounts and Strategy for Baker Hill, Bryan helps financial institutions increase revenues, reduce costs, and meet compliance requirements through process automation solutions.