10 in 2010: Banking Trends for the New Year

Which technology and business developments will change the competitive environment in 2010? Which executives and public figures will grab headlines? What companies and organizations will be in the news? The BS&T editorial team offers some predictions for the coming year's bank technology newsmakers.

1. Lending: Back from the Brink?

With President Obama pressuring banks to step up lending, 2010 could see a more active market after five consecutive quarters of reduced lending. Perhaps partly responding to criticism from politicians and the public, large institutions such as Bank of America (which says it will increase small-business lending by $5 billion next year) and J.P. Morgan Chase (which has committed to an increase of $4 billion) have signaled their intentions to be more active lenders. Regional and community banks also are getting into the act. For example, Rosemont, Ill.-based Cole Taylor Bank recently established a residential mortgage origination line of business. Whatever the motivations, banks looking to manage the risks and costs of increased lending activity are going to depend on technology -- including more-sophisticated credit risk-modeling capabilities, enterprise content management capabilities, and transaction-tracking and analytics tools that help detect and prevent fraud -- to do so. According to TowerGroup's 2010 consumer lending forecast, "Financial services institutions will increase IT investment for integrated credit risk management, improved regulatory compliance management, and new loan collections and portfolio risk management solutions." -- Katherine Burger

If 2009 taught us anything, it's that people were willing to forget the last bizarre decade of Michael Jackson's life. But more important, it also taught us that people enjoy a good mobile app. In April, before the site even reached its first birthday, more than 1 billion applications had been downloaded from Apple's iPhone App Store. That number has since doubled. A small but growing percentage of those apps were developed by financial institutions. With institutions such as USAA leading the way with its mobile remote deposit capture app, the banking industry is beginning to recognize the importance of not just the mobile channel, but the mobile application channel specifically. And it's a good thing -- the iPhone has shown no signs of losing popularity, while recent offerings based on Google's Android mobile operating system promise to expand the mobile application development universe. As consumers become accustomed to mobile apps in their everyday lives, they'll demand similar functionality from their banks. -- Nathan Conz

3. Navigating the Emerging Markets

To successfully navigate today's troubled economy, banks need to be able to compete profitably in emerging markets. China is the fastest-growing major economy in the world. While the world's wealthiest have seen their savings evaporate recently, the number of millionaires in China is actually growing. By the end of 2009 the country will be home to 450,000 millionaires with a net worth estimated at US$1.73 trillion, UPI recently reported. But it's not just the wealthiest who are saving -- economists estimate that the average Chinese citizen saves between 30 and 40 percent of his or her disposable income, a rate that is at least twice as high as in the U.S. Now the country is looking for new investment vehicles as well as the technology infrastructure it needs to become a major player in the global financial markets -- creating opportunities for Western banks and technology providers. -- Melanie Rodier

4. A Regulatory Voice

As the issue of financial regulation has become more and more politicized, at least one public figure has managed to stay largely above the fray, with some admirers on both ends of the political spectrum. Congressional Oversight Panel (COP) chair Elizabeth Warren has been a critical voice in the regulatory debate, but she has avoided the kind of tired rhetoric or piling on that many politicians employ to score points in the media. "To restore some basic sanity to the financial system, we need two central changes: Fix broken consumer-credit markets and end guarantees for the big players that threaten our entire economic system," she recently told Newsweek. Warren's work was set to end in June 2010, but when Treasury Secretary Timothy Geithner extended TARP until next October, he also extended the life of the COP. -- N.C.

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