Profits, progress and prospects bring a positive outlook for the financial services sector in the new year
Despite the challenges COVID-19 has presented to the financial services sector in this unprecedented year, experts remain bullish on banking’s position heading into 2021. The industry is being buoyed by its third quarter earnings results where “much lower levels of loan loss reserve builds than in the first half of 2020 as the domestic economic backdrop has not worsened over the last quarter, a trend that we expect will continue for the remainder of earnings reporting season.” But it’s not just economics that are helping financial services finish 2020 strong.
Technology has played a transformative role for facilitating remote relationships and pivoting quickly to help banking respond to emerging needs in the pandemic age. In fact, what we have witnessed is an impressive display of the speed of change quickly moving transactions online where “[a]lmost overnight, we’ve seen a seismic shift from the high street to online banking and other financial and professional services.” In fact, technology has done what experts have been predicting for a decade, reshaping experiences with the “COVID-19 crisis accelerat[ing] the redesign of the banking customer experience.”
Finally, as we head into the last month of a year like no other, we’re watching mergers and acquisitions return in a big way with PNC’s takeover of BBVA’s U.S. presence as a match that The Economist believes could “spark consolidation on both sides of the Atlantic.” In fact analysts are beginning to report that banking M&A is poised for a big bounce with “a dramatic increase in merger and acquisition activity.” This is good news for banking, because it represents growth or as Adrenaline’s Sean Keathley, says, “The bottom line is M&A empowers banks to scale. It’s a path to value.”
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