Tim Melvin is reporting from Bank Director Magazine Acquire or Be Acquired Conference

At the Bank Director Magazine Conference in Phoenix, the general mood is upbeat. However, bankers have some concerns about the industry in 2020.

Threats for the Road Ahead

At the top of the list is competition form fintech firms and big tech companies. Millennials are more focused on technology than one-on-one discussions in a branch. They have emerged as the target market for fintech companies and big tech companies like Amazon (AMZN) and Apple (AAPL). It is a top concern that fintech will disrupt commercial banking in the same way it did to consumer banking in recent years.

The prospect of a slow economy and low net interest margins have rattled banker sentiment. Nothing has emerged in the Fed’s data that indicates GDP growth above 2% this year. I have had many discussions with attendees. Few bankers expect the Fed to hike interest rates this year. Lower rates could hinder growth for many smaller banks in 2020.

Cybersecurity is also a top concern. The more mobile and digital banks become, the more exposed they will be to cyber-attacks. Current estimates state that more than 700,000 attacks hit a bank’s IT system each and every hour of the day, seven days a week.

Finally, one investment banker people won’t talk about the most significant risk because it is politically incorrect. He noted that a change in control of the White House or Senate could completely change the banking environment. Bernie Sanders and Elizabeth Warren are viewed as the biggest threat to banks, in his mind.

Right now, the heads of agencies that oversee the banking industry are bank-friendly. That factor would change quickly in 2021 political control flips in November.

Recent: Melvin: Observations From the Bank Director Magazine Acquire or Be Acquired Conference