We are looking at a radically transformed banking industry heading into 2020 thanks to FinTech, consolidation, digital-first banking, and continuous innovation. We even saw a credit union buy a bank in Arizona this year.

Yet, despite the constant disruption, the banking industry remains almost universally optimistic, despite some lingering question marks.

“We will be heading into an election year so anything can happen,” says Todd Gerber, WaFd Bank Arizona commercial manager. “Headwinds include a continued tight labor market with unemployment in Arizona at 4.9 percent; increase in minimum wage to $12 in January 2020; and trade war and increased tariffs with China causing additional uncertainty among business owners.

“Conversely, tailwinds — or positive — factors include long-term interest rates remaining low (since August 2019, the 10-year treasury has been below two percent); advances in technology continue to drive efficiencies for the business community; inflation remains relatively low; and domestic net migration to Arizona continues to be a positive factor due to lower cost of living,” Gerber says.

So what can we expect out of the banking industry heading into 2020? Here’s a snapshot of what some of Arizona’s leading banking experts say we can look forward to in 2020:

Megan Ackaert, region manager for middle-market banking, JP Morgan & Chase Co.: “We work with great local companies in various industries and we’ll continue to help them make acquisitions, expand their footprints (domestic and international), buy new buildings and/or upgrade their treasury platform to speed up cash flow. Helping our clients achieve their goals is the best part of my job.”

Jeff Friesen, president of the Arizona Region, Enterprise Bank & Trust: “I believe the banking industry will remain healthy in 2020. However, the biggest disruption will be due to the fast growing technology space — FinTech. While expansion in technology, within the financial sector, will continue to be very creative, it creates issues within the current regulatory world, which will need to be addressed.”

Don H. Garner, CEO, Alliance Bank of Arizona: “Based on research Alliance Bank of Arizona shared during our 2019 Economic Forum, we’re seeing strong growth heading into 2020. Positive employment figures and continued growth in Arizona’s key industries, including both commercial and residential real estate, healthcare and tourism, are also leaving our clients optimistic about 2020, which is exciting to hear as their business-banking resource.”

Candace Hunter Wiest, president and CEO, West Valley National Bank: “I continue to be concerned about the possibility of a mild recession. Hopefully, the Fed will continue to sit pat with interest rates. The recent increases have significantly impacted some of our small businesses.  And the housing market seems to have slowed in the markets we serve, which include Arizona, Southern California and Las Vegas. I do not expect any meaningful regulatory relief.”

Joel Johnson, market president, FirstBank: “I’m optimistic about the banking industry in Arizona. Economists are anticipating more job growth and rising wages and there’s enough inventory to keep real estate in check. All of this has an impact on the financial sector’s viability, and it’s a telltale sign that we have some healthy years ahead.”

Jim S. Patterson, president and CEO, UMB Bank Arizona: “We are fortunate enough to have experienced continuous growth in Phoenix. We are excited to continue to grow our business while supporting our clients in reaching their goals, whether that be for growth and expansion or preparing for succession.”

Dave Ralston, CEO, BOK Financial:We are heading into 2020 with a strong economy, close to full employment and low interest rates. Our industry should benefit from this environment but we are not without challenges. Most significantly, interest margin compression has put pressure on bank earnings with no relief in sight as the Fed contemplates further rate reductions.”

Rob Schwister, Phoenix Metro Market president, Alerus: “The industry is very healthy, so I see expanded investment in new technologies that will make it easier for people to do business with us.”

Michael J. Thorell, president and CEO, Pinnacle Bank, which was acquired by Arizona Federal Credit Union earlier this year: “We continue to share the hope that we will see reasonable regulatory reform which will result in a positive experience for both the industry and our clients.”

Craig Zollinger, managing director and Intermountain Region head, JP Morgan Chase & Co.: “Optimism is at its highest level in years, according to the JPMorgan Chase Business Leaders Outlook released in February. Business owners and executives are overwhelmingly upbeat about the global, national and local economies for the year ahead. Most executives are confident in their own company’s performance as well. Business executives point to a strong economy, easing on the regulatory front, and tax reform as the key drivers behind their positive outlook. This should bode well for the financial services sector as companies look to invest in their businesses and seek growth opportunities, both domestically and abroad. The capital markets business could also be very active in the coming year.”