With the end of the year fast approaching, we asked Peter Nigro, Ph.D., Sarkisian Chair in Financial Services and Professor of Finance at Bryant, to talk about what’s ahead for the banking industry in 2022. Here’s what Nigro, a former economist with the Comptroller of the Currency in Washington, D.C., had to say.
Bank performance in 2021 was the best in over a decade despite the volatility caused by COVID as they managed to avoid big losses due mainly to Fed policy and fiscal stimulus. I am cautiously optimistic that we will continue to see a rebounding economy in 2022, which bodes well for bank performance since it is closely tied to the economy. Inflation remains a concern, however, I am a believer that the Fed will act to minimize its long-term impact.
"I am cautiously optimistic that we will continue to see a rebounding economy in 2022, which bodes well for bank performance since it is closely tied to the economy."
An industry at a crossroads
Despite the likely economic positives, the industry is at a crossroads due to increased competition from not only other banks – but emerging fintechs as well as big techs who are capturing a larger piece of the drivers of bank profitability, especially in the payments and lending space.
Reacting to an ever-changing digital world
Long protected by regulatory environments, financial institutions are being challenged by powerful technology providers who are able to deliver at greater efficiency and lower costs. It is changing how existing players operate and it is creating new ways to deliver core services. These trends towards digitalization and industry convergence have been expedited by COVID. Thus, we should expect the industry to continue to consolidate and evolve in the emerging digital world.
About Professor Nigro
Peter Nigro, Ph.D., is a Professor of Finance at Bryant University. He previously served as an economist with the Office of the Comptroller of the Currency in Washington, D.C, which regulates all national banks. He is an expert on the Federal Reserve, monetary and fiscal policy, financial saving, credit risk, and fair lending issues. Professor Nigro has been featured in Fortune, U.S. News & World Report, MarketWatch, Adweek, and Law360.com on the impact of COVID-19.