BANKING IN 2020: THE VIEW FROM HERE FEI OF NORTHEASTERN WISCONSIN - - PowerPoint PPT Presentation

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BANKING IN 2020: THE VIEW FROM HERE FEI OF NORTHEASTERN WISCONSIN - - PowerPoint PPT Presentation

Nov 15, 2022 251 likes •415 views

BANKING IN 2020: THE VIEW FROM HERE FEI OF NORTHEASTERN WISCONSIN OCTOBER 24, 2019 8 TRENDS SHAPING BANKING National trends impact financial services in Wisconsin Consumer Channel Preferences Bank & Branch Consolidations

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SLIDE 1

BANKING IN 2020: THE VIEW FROM HERE

FEI OF NORTHEASTERN WISCONSIN OCTOBER 24, 2019

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SLIDE 2

8 TRENDS SHAPING BANKING

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National trends impact financial services in Wisconsin

  • Consumer Channel Preferences
  • Bank & Branch Consolidations
  • Spending at Megabanks
  • Rise of Non-Bank Competitors
  • Regulatory Environment
  • Fraud & Operational Risk
  • Fintech Partnerships
  • Service Provider Consolidation
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SLIDE 3

CONSUMER CHANNEL PREFERENCES

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Consumers prefer digital channels to open accounts…

MAJORITY OF CONSUMERS PREFER DIGITAL ACCOUNT OPENING

Source: Novantas study (Oct 2019)

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SLIDE 4

CONSUMER CHANNEL PREFERENCES

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…and increasingly to transact…

BRANCHES NOW CONDUCT ONLY HALF OF ALL BANK TRANSACTIONS

Source: Associated Banc-Corp 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2012 2013 2014 2015 2016 2017 2018 2019 Branch ATM Digital

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SLIDE 5

CUSTOMER PREFERENCES DRIVING BRANCH CONSOLIDATIONS

BANK & BRANCH CONSOLIDATIONS

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…leading to fewer banks, fewer branches

Sources: Barclays State of the Industry (Oct 2019); FDIC

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SLIDE 6

2Q19 WI BRANCH ACTIVITY

BANK & BRANCH CONSOLIDATIONS

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Wisconsin consolidation continues as well

Source: SNL Services

WISCONSIN ACTIVITY

  • Bank Deals: Year-to-date

through September 2019, 16 bank acquisitions announced— more than in 2017 and 2018 combined

  • Branch Activity: Branch closures

continue to exceed branch

  • penings by a wide margin
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SLIDE 7

CREATION OF THE LARGEST U.S. BANKS

BANK & BRANCH CONSOLIDATIONS

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Four “megabanks” emerged from the financial crisis

Sources: Federal Reserve, General Accounting Office

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SLIDE 8

MEGA BANK TECHNOLOGY SPEND DWARFS REST OF INDUSTRY…

SPENDING AT MEGABANKS

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Tens of billions spent on technology, customer experience

Sources: Barclays State of the Industry (Oct 2019); S&P Market Intelligence; McKinsey

…COMBINED WITH MARKETING, SIGNIFICANTLY SKEWS RESULTS

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SLIDE 9

RISE OF NON-BANK COMPETITORS

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Non-banks impacting competition in commercial…

NON-BANKS GAINING IN COMMERCIAL LENDING

Sources: Centerview Partners; FDIC, Federal Reserve

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SLIDE 10

RISE OF NON-BANK COMPETITORS

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…and in retail banking

SUMMIT CREDIT UNION Assets: $3.2 Billion Deposits: $2.2 Billion 2018 Net Income: $39 Million Full-Service Branches: 34 ASSOCIATED BANC-CORP Assets: $33 Billion Deposits: $25 Billion 2018 Net Income: $323 Million Full-Service Branches: 240

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SLIDE 11

REGULATORY ENVIRONMENT

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Dynamic environment on many regulatory fronts

SELECT REGULATORS FOR MID-CAP BANKS REGULATORY THEMES

  • Consumer Protection
  • Community

Reinvestment

  • Capital Adequacy
  • Risk Management
  • Bank Secrecy & Money

Laundering

  • Public Company

Disclosures

  • Vendor Management
  • IT Security
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SLIDE 12

FRAUD & OPERATIONAL RISK

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Significant challenges for the entire industry

RISK THEMES

  • Threats to Bank Customers
  • Direct Attacks on Banks
  • Payment Systems Risk
  • Internal Security
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SLIDE 13

CORE PROCESSORS

FINTECH PARTNERHIPS

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Complex technology ecosystem, even for mid-sized banks

PAYMENTS VEHICLES PRODUCTS/CUSTOMER EXPERIENCE EFFICIENCY & RISK

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SLIDE 14

SERVICE PROVIDER CONSOLIDATION

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Fiserv/First Data deal impactful for WI and WI banks

Source: Fiserv/First Data investor presentation Jan 2019

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SLIDE 15

BANKING IN 2020: THE VIEW FROM HERE

FEI OF NORTHEASTERN WISCONSIN OCTOBER 24, 2019