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10 July 2023 / Daniel E. Best / Stuart A. Best

2023 MBA Conference Takeaways: Fintech, Upcoming Recession, and Touchdowns

Shareholders Dan Best and Stuart Best recently attended the Michigan Bankers Association (MBA) 137th Annual Convention in Mackinac Island, MI. Now, Dan is sharing his top takeaways!
 
It was the best weather I can recall, with each day being sunny and 75 degrees. The conference kicked off with a picnic lunch in the front courtyard of the Grand Hotel. The MBA did a great job of lining up speakers and providing plenty of opportunities to network with other attendees. Below are my top four highlights from this interactive and educational convention.
 

1. The consensus among economists is that we will be in a recession within 18 months

The conference commenced with a presentation by chief economist Sayee Srinivasan from the American Bankers Association. The clear consensus among industry economists is that we will experience a recession in the next 12-18 months. Sayee is concerned that there will be no soft landing and that we will be experiencing a true recession. He does not expect the Federal Reserve will increase rates further and believes that chairman Jerome H. Powell’s comment is strictly posturing. As for financial institutions in general, the one concern that no one is talking about is the impact of private credit. It is estimated to be $1.6 trillion in 2023. There is zero oversight over these private firms and he does not believe they have adequately hedged against insurance rate risk.
 

2. Bank regulators will be focused on risk

Director of the Michigan Department of Insurance and Financial Services Anita Fox presented what the state bank auditors will be focusing on in the next round of audits. She said that their focus is consistent with the federal regulators and regulators from the nearby states. Not surprisingly in light of the recent bank failures, auditors will be focusing on risk management and the impact of unrealized losses. She also implored all bankers to expand banking to underserved populations. She felt strongly that all banks should be offering very simple non-checking depositary accounts with debit card access and low transparent fees. Anita’s concern is that if the banks fail to better serve this population, check cashing companies and payday lenders will continue to fill this void costing the average person in excess of $3,000.00 per year to access their money.
 

3. To survive, all banks, regardless of size, must embrace technology 

National Banking Services CPA Thomas W. Grottke spoke on the changing landscape and relationships with fintech firms. What once was a symbiotic relationship is changing dramatically, creating opportunities for banks, as well as risks. The industry trend remains to have fewer but much larger banks. There has been a 47% decline in the number of banks since 2005. There have been virtually no new charters recently and in the last two years, there have been fewer than 25 new charters nationwide.
 
Thomas believes that community banks can compete with these massive fintech firms, not on price but on service and focusing on their customers. Banks need to be part of the digital world yet maintain their presence on the ground. By knowing their customers, they will be able to provide them with better value than the fintech companies.
 

4. You don’t have to like your enemy to respect them

The keynote speaker was University of Michigan’s head football coach Jim Harbaugh. Being a graduate of The Ohio State University, I was less than thrilled with this selection. Based on the stories I had heard, I had expected a different kind of coach. Although I will never like Wolverines, I must begrudgingly say I respect Jim. His speech and demeanor were very grounded.
 
Jim said that his three F’s are Faith, Family, and Football - in that order. He told many stories involving his father and his own trials and tribulations. He is an ardent admirer of the army and its code. He made no belittling references to any other teams. I must say that I enjoyed listening to him.

If you have any additional questions about Weltman’s consumer collections, probate recovery, or real estate default solutions, feel free to contact Dan and/or Stuart at any time.
 
These blogs are not a solicitation for business, and they are not intended to constitute legal advice on specific matters, create an attorney-client relationship or be legally binding in any way.

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