CHICAGO–A new year brings with it a new list of predictions and prognostications, ranging from the concerns/non-concerns of credit union leaders to what the banking industry has planned to what the economy might hold.
Here is a synopsis of some of the forecasts for 2019 on which CUToday.info has reported previously. In cases where CUToday.info has previously reported an item, a link for the full story is also included.
The Banking Outlook for 2019
CHICAGO –The top trends and expectations for the financial services industry in 2019 have been released by the Bank Administration Institute (BAI).
The trends were highlighted during a webinar, BAI Banking Outlook Webinar: What's Next 2019 Outlook.Highlights from the BAI Banking Outlook include a look at the top three business challenges facing financial services leaders, the top banking priorities according to consumers, and the top banking priorities according to financial services leaders. The full story can be found here.
Biggest Worries, Non-Worries of 2019 for CU Execs
ARLINGTON, Va.—Interest rates and asset yields are the issues credit union leaders are most optimistic about for 2019, while the economy remains the biggest worry, according to a new report.
NAFCU’s Economic & CU Monitor found almost 25% were most positive about where interest rates and asset yields are headed in the new year. The latest issue of the Monitor highlights that rising interest rates have benefited credit unions in recent years – net interest margins are up roughly 25 basis points since 2014, and 10 basis points in 2018 alone.
Approximately 15% of respondents were most optimistic about both lending and overall growth.
On the other hand, the economy was named by 23% of Monitorrespondents as something they're concerned about, NAFCU reported. In addition, 19% also cited concerns about rising interest rates, specifically related to competition for deposits.
For the full story, go here.
Could European-Style Privacy Rules Be Coming to U.S.?
CANTON, Ohio–With Facebook now allowing advertisers and marketers direct access to personal data, including personal conversations, the effect may be to accelerate consideration in the U.S. of the General Data Protection Regulation (GDPR) privacy rules now in place in the European Union, according to Dr. Barbara Rembiesa, president and CEO of the International Association of IT Asset Managers (IAITAM).
Such a development would have a major impact on Information Technology Asset Management (ITAM) practices in the U.S, said Rembiesa.
The data sharing deals which Facebook engaged in have been revealed to be especially liberal with their access to personal identifying information (PII), said IAITAM in a released statement. The association added this PII can include everything from a user’s name and email address to their photos, birthdate, and even private Facebook Messenger texts. The intent was to benefit everyone using Facebook.
“Advertisers and marketers used their wide-open access to harvest PII from Facebook users without the knowledge of the individual,” said Rembiesa. “As a result, some users of Facebook and other social media platforms are now looking for a solution to protect their data as well as their digital identity. Those same people have looked at the EU and their sweeping regulation that turned the power and authority of protecting PII back to the individual: the GDPR … The recent Facebook discovery has people looking for the adoption of something like GDPR in the U.S. faster than anticipated. It seems that people feel they are able to make decisions about their personal data better than any company or organization would.”
What would happen if the U.S. followed such a path?
“Assuming a bill like GDPR is passed in the United States, the next question is how corporations will adopt the new regulation,” suggested Rembiesa. “Organizations in the European Union currently use Data Protection Officers (DPOs) for handling compliance, and many U.S.-based companies are actively recruiting DPOs in preparation for what is to come.”
Accenture Study: Consumer-Centric Pricing Strategies Will Be Critical In 2019
NEW YORK–In order to remain relevant and drive revenue in 2019 and beyond, financial institutions must use consumer-centric pricing strategies, according to a new Accenture/Nomis survey of retail banks of varying size.
“This strategy allows banks to make dynamic, real-time pricing decisions tailored to customers’ needs and preferences; customer activity is captured across channels and analytics are used to maximize customers’ lifetime value across all product lines,” according to Accenture.
Among the survey’s findings:
- Slightly more than 40% of bankers said they plan to compete on price to gain market share over the next three years
- “Yet, a lack of coherent strategy across different lines of business is the top obstacle to implementing a customer-centric pricing (CCP) strategy – 30% of banks’ lines of business have no such strategy,” Accenture said
- Banks that don’t make CCP a priority require pricing exceptions for over 50% of deals, compared with less than 40% for banks that prioritize CCP
For full story, go here.
Report Examines How Market Changes Might Affect Commercial RE Lending in 2019
NEW YORK–A new report offers some insights into what a flattening yield curve, short-term rate increases and slower upticks in longer-term yields mean for the commercial real estate industry.
The report, published by Trepp, examined the future for commercial mortgage-backed securities (CMBS) loans, which are most often priced off of the 10-year swap, which in turn is a spread to the 10-year Treasury rate.
“The simple answer is that loan rates are going up,” the analysis notes. “A more complicated answer is that loan spreads have generally averaged about 150 basis points when the 10-year was above 4% and around 250 basis points when the 10-year was below 4%. If we assume the 10-year gets back to 4% in the next year or so and that loan spreads end up around 200 basis points, average CRE loan rates should climb to 6%. Loans originated now at 4.5-5% rates would be worth about 7-10% less (using a simple assumption of 7-10 years in average duration).
2019 To Be Breakout Year for Mobile Wallets
HAMPSHIRE, U.K.—Will 2019 finally be the year in which mobile wallet usage takes off? A new Juniper Research study has found that nearly 2.1 billion consumers worldwide will use a mobile wallet to make a payment or send money in 2019, up by nearly 30% on the 1.6 billion recorded at the end of 2017, reported Mobile Payments Today.
For full story, go here.
After Banner Year, What’s Next for Auto Lending?
LAWRENCEVILLE, Ga.—It was a “banner year” for used vehicle values in 2018, but 2019 won’t treat the pre-owned market quite as well, according to Black Book.
While in 2019 used values will be affected by a significant number of off-lease vehicles coming back to market, overall, depreciation should remain fairly stable and used demand “healthy,” the company said.
Anil Goyal, executive vice president, operations at Black Book, emphasized that 2018 was a very strong year for used values.
“In 2018, we are seeing annual depreciation rate trend at 12%, while historically we have seen in the past five years a range from 12%-18%,” he said. “In 2019, our forecast is 15%, which is about the average depreciation in recent years.”
Black Book is projecting off-lease returns will be higher in 2019—300,000 more—totaling 4.2 million.
For full story, go here.
2019 Brings a New Countdown for ATM Compliance
MT. PROSPECT, Ill.–Credit unions are being reminded that the new year will also bring a new countdown: just one year until ATM operating systems must be upgraded to Windows 10.
On Jan. 14, 2020, support for Windows 7 ends and FIs will need to convert to the new release, noted Cummins Allison, which has provided a new list of questions and other points outlining key features of Windows 10 and what is involved in making the switch.
For full story, go here.
CUNA’s 2019 Advocacy Agenda
ASHINGTON—CUNA has released its advocacy agenda for 2019. CUNA Chief Advocacy officer Ryan Donovan said the CUNA/league system is eager to continue its work for and alongside the credit union movement.
“Our agenda has been developed by listening to credit unions, leagues and other stakeholders throughout 2018, and is fine-tuned to help us continue to revolutionize the operating environment for credit unions,” said Donovan. “Credit unions have told us they want us to remove regulatory burdens, expand and protect credit union powers and opportunities, enhance information security and preserve the credit union tax status, and that’s what our agenda is built around.”
For full story on agenda, go here.
‘Prosperous Stretch’ to Continue into 2019
MADISON, Wis. – Credit unions can expect U.S. economic growth to remain above historical averages through the end of 2019, said CUNA Mutual Group’s director and chief economist Steven Rick.
While the economy’s growth will likely retreat from its 3% pace in 2018, to 2.3% in 2019, the current economic expansion will become the longest in American history if it lasts through the end of 2019, he told attendees at CUNA Mutual Group’s ninth annual Discovery Conference Thursday.
“We continue to enjoy one of the most prosperous stretches of economic expansion in our country’s history, and this positive economic climate has greatly benefitted credit unions,” said Rick. “Today, there are more job openings than unemployed people in this country, marking the first time that’s ever happened. Unemployment sits at about 4% now, and should fall as low as 3.4% in coming years – far below the expected long-term unemployment rate of 4.7%.”
For full story, go here.
Where Credit Unions Will Be Gathering in 2019
CUToday.info has a full calendar of 2019 credit union meetings and events available here.