Mid-year trends financial institutions should watch


MEMPHIS, Tenn.–(BUSINESS WIRE)–SRM (Strategic Resource Management), an independent advisory firm serving financial institutions and other industries in North America and Europe, today shared insights into key trends it has seen impact banks and credit unions so far. present this year and predictions on how they are likely to affect the industry in the future.

Banks and credit unions will need to pay attention to developments with digital assets, Buy Now, Pay Later (BNPL), and regulatory oversight, while dealing with the fallout from inflation and aggressive interest rate hikes.

“The first half of 2022 has been remarkably eventful for the financial services industry with significant changes and developments in emerging areas,” said Brad Downs, CEO of SRM. “There is no reason to expect the pace of change to slow down in the second half. These questions will remain important to the success of all financial institutions today and in the future.


Cryptocurrency has been a priority for the entire financial services industry this year. Several financial institutions, especially credit unions, have launched crypto buying/selling/holding capabilities over the past few months in partnership with fintech companies providing the supporting custodial services, as required by the current positions of regulators.

After briefly hitting a high of $68,000 in November 2021, the price of a bitcoin fell below $20,000 mid-year before beginning a nominal recovery. On a broader level, cryptocurrencies as a whole have lost two-thirds of their value, dropping from nearly $3 trillion to less than $1 trillion.

Rapidly changing developments in this space have heightened the need for customer education – a role that banks and credit unions are well positioned to fulfill, given their existing trusting relationships. Additionally, multiple surveys indicate that a large consumer base would prefer to conduct crypto business through their trusted financial institution. The debacles with uninsured entities TerraUSA, Celsius and Voyager illustrate how sensible regulation could stabilize and further develop the market.

Buy now, pay later

The Buy Now, Pay Later (BNPL) space has encountered a similar trajectory to crypto. Some of the biggest valuation drops have been seen among BNPL-focused fintech companies in the US and abroad. At the same time, the use cases are multiplying. With recent inflation, standard household purchases are looking more and more like logical candidates for the BNPL as consumers continue to spend despite inflation fears.

The BNPL model has attracted the interest of a significant consumer demographic, which sometimes sees it as an alternative to credit card debt. SRM continues to see a role for financial institutions in the BNPL space – an idea explored in this recent white paper. Although regulation will increase, financial institutions are equipped to meet this challenge. It’s important to choose partners wisely, monitor risk, book appropriately, and determine the right positioning of the product among an institution’s wider range of offerings.

Regulatory changes and developments

Federal agencies handled requests for comment and information on various issues, such as the executive order that seeks clarification on digital assets and calls for reports from many agencies by December.

The Federal Reserve’s request for comment on central bank digital currencies (CBDCs) has attracted an unprecedented volume of public submissions. Statements from new Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra outlined his priorities, including revisions to the CARD Act, Fair Credit Reporting Act, and overdraft/NSF charges, among others.

The prospect of further regulation seems more a matter of when than if. The industry expects significant regulatory activity in late 2022, regardless of November’s midterm elections.

About SRM

SRM (Strategic Resource Management) has helped over 1,000 financial institutions add over $5 billion in value to their bottom line in areas such as payments, digital transformation, core processing, artificial intelligence, digital assets and overall operational efficiency. SRM has reduced costs, created revenue opportunities, increased productivity and provided a competitive advantage to customers in an environment of constant and accelerating change. Visit www.srmcorp.com for more information, and follow us on LinkedIn and Twitter for timely and relevant information.


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