Looking ahead to 2022, financial institutions can expect a cooling down of the market in order to curb above-average inflation, an emphasis on talent management, a booming crypto market and an emphasis on payments modernization. Consider a few of the following trends when thinking about your strategy for this next year:
Fed Rate Hikes
The fed plans to raise interest rates a few times in the coming year in order to curb high inflation and align itself with a generally strong market following initial concerns over Covid and a pandemic that, despite its ongoing issues, is expected to become increasingly under control.
Accordingly, financial institutions will need to compensate and adjust for increased mortgage rates in an already-expensive market for first-time Millennial homebuyers, a less audacious business environment with reduced access to bottom-line business loans and a slightly cooled off stock market.
A Tailored Strategy for Talent Management
2021 was largely defined by “The Great Resignation,” with an incredibly competitive landscape for employers to hire and retain employees.
Because of this, financial institutions will need to find creative and enticing ways to attract and retain their top talent, including through competitive benefits and clear growth trajectories for employees.
In particular, a clearly defined growth trajectory can help expand the lifecycle of employees, increase internal satisfaction, encourage skill development and help differentiate a financial institution from its competitors. For financial institutions, creating a growth plan centered around the universal banker helps facilitate a mutually beneficially path to growth and increased value for your employees.
Expanding Crypto Market
Crypto adoption has become popular for a number of reasons. There is an increasing interest in new, non-governmentally-bound currencies to offer international stability, there is interest in engaging in a new market early before their valuations are through the roof, and there is a low barrier to entry for trading, using and investing in the form of fees.
Lawmakers and governments will continue to monitor and work to understand the regulatory implications of cryptocurrencies, and how they can have responsible oversight, or what they choose to recognize as legitimate. Regardless, the buzz around crypto was strong this past year and is likely to continue into 2022.
Payments Modernization
Financial institutions have a major opportunity to improve the value chain of their payments processing in 2022 and beyond. From back to front, new solutions are becoming available to cut expenditure and increase speed in the clearing, processing and customer-facing elements of the growing online payments market. By investing in new solutions now, your organization can clear the way for increased profitability year-over-year in an increasingly digital payments ecosystem.
