Editor's Note: The following is an excerpt from a recent AZ Big Media
The banking and financial services industry is undergoing a massive change. The industry is facing disruptive competitors. Digital and mobile banking continues to evolve and bring security risks with it. Bank branches are starting to look more and more like Apple stores and shopping mall kiosks. Interest rates have started rising. Regulation has never been so costly.
These changes have the potential to shake the very foundation on which the banking industry has been built and has operated for generations. And banks have to balance these changes with rising perception of the industry.
Az Business Leaders magazine talked with Chris Sailus, vice president and Northeast Arizona division manager at Washington Federal Bank, to get his take on what's happening in the industry and what we can expect in 2017.
Q: What sectors of the banking industry are strongest going into 2017?
A: Real estate-related lending will continue to be a big driver in 2017 in new multifamily apartments, residential housing developments, and commercial industrial. The middle market had robust growth in 2016 and we expect the same this year. There is capital and equity coming in from investors.
Q: What sectors of the banking industry need some help going into 2017?
A: There will be challenges in the fin-tech field as they continue to seek funds for the peer-to-peer marketplace, for banks that have exposure to the oil and gas industries and for non-depository lenders deciding to continue raising capital or partner with a bank.
Q: How do you think automated banks will impact the industry over the next decade?
A: We believe that automation isn't a bad things, as long as it is to support and enhance the delivery of services in a personable way. Innovation has to be a key for the banking industry to a deliver better, secure and cost effective client services.
Q: What banking issue or trend will have the biggest impact on banking in 2017 and what could that impact be?
A: Uncertainty. The political environment will be a question mark for some time, no matter who takes the presidency, until we see their regulatory stance. Just as important are interest rates; the expectations of the market and the direction from the Federal Reserve moves from Fed meeting to meeting. Moving rates up too quickly can cause detrimental effects in consumer and commercial lending, and potentially ruin a recovering housing market.
Q: What is your outlook for banking industry in 2017?
A: Growth will remain manageable and sustainable versus what we went through pre-recession. We expect to continue seeing new businesses moving to Arizona, and growth in both small and mid range companies. Residential housing will enjoy relatively low rates, affordable prices, limited existing housing inventory, and builders ramping up development projects.
Washington Federal's Ashland, OR features industry-leading automated technology, while still providing face-to-face, personal customer service.