Like every industry in our economy, COVID is upending banking as well. Economic turmoil and will likely accelerate many of the banking trends we saw at the end of 2019. The banking entities that were embracing the shift to drive segmentation and choice in the market will likely succeed best. As business owners, we should brace for another round of bank failures as debt defaults destroy bank equity.
The year began with our smaller community banks focused on growth and earnings to fulfill shareholder expectations. They were accomplishing this by leveraging their strengths in relationship lending and their access to technology to grow the small business loan portfolio profitably.
In the wake of COVID, these relationships will assist with work-out scenarios for underwater debt and being able to continue to fund loans for the businesses that continue to grow. 2020 banking trends will continue the push to further self-service and a faster, more efficient banking experience. We have been seeing these trends grow for several years now and will only accelerate now that we are moving into a lower human contact society—at least near term.