Banking and Finance Economic Forecast
PHOTO/Matt VOLPINI
New banking partners Edward Manzi Jr., left, of Fidelity, and Guy Boyer of Barre Savings Bank say the two institutions they lead share key values. That facilitated a merger that is underway.
While banks have prepared for a potential federal interest rate hike for the first time in nearly 10 years, many are being forced to deal with continuing difficulty maintaining their independence. Still, there will be more room for banks to profit in 2016 and we expect the finance industry to get a leg up from the fed's first interest rate hike in years.
Bank mergers will continue
While the pressure to merge had been building for years, it appears that the floodgates have finally broken and the mergers are beginning. Even solvent local banks are looking to mergers to ensure they can continue to serve the community while meeting regulatory guidelines. Whether it is done through merging holding companies or the banks themselves, this is something sure to continue into 2016.
Company's margins will grow
Some of that pressure that has led to mergers will see some relief for banks, with the federal interest rate set to rise. This will give banks the wiggle room for more profits but could lead to a hunt for market share with some banks maintaining low rates to pull in new customers. While this might mean short-term gains, the long-term viability of this kind of play for market share is risky.
Online security will reach a new level
The security of all kinds of online financial transactions continues to be a major concern for every segment of business. While banks are often the most well protected, they are pouring resources into maintaining that protection. With new technology like the credit card chip and pin system making its way through the system, even small retailers are being made a part of cutting edge financial security steps.
Top banking and finance stories of 2015
Banks combining power, keeping identities
Banks on interest rate rise: Bring it on!
Read more of our Economic Forecast predictions
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