Q2 Announces 2023 State of Commercial Banking Market Report

By Q2

19 Jan, 2023

New report finds strategic investments in key technology areas will be critical in enabling financial institutions to serve business client needs in 2023

AUSTIN, TX (Jan. 19, 2022)—Q2 Holdings, Inc. (NYSE:QTWO), a leading provider of digital transformation solutions for banking and lending, will release its 2023 State of Commercial Banking Market Analysis Report on Thursday, Jan. 26, following The State of Commercial Banking webinar at 2 p.m. CST. The report, based on insights mined from Q2’s proprietary databases, is an annual review of the major trends in the commercial banking industry from the previous 12 months, as well as a look at the challenges and opportunities ahead in the coming year. The annual webinar provides an overview of report findings and offers exclusive insight into commercial banking market trends and predictions.

“Evolutions in the banking industry in 2022 drove key changes in how financial institutions approach the market, including how they think about customer-facing and internal-facing technology,” said Gita Thollesson, manager, strategic advisory services for Q2. “Amidst macro environment uncertainty, data predicts that banks will begin to think about their digital investment more strategically, shifting their focus to utilizing technology to drive efficiency in back-end processes, smarter workflows, and more employee engagement.”

Findings for this report are based on Q2 PrecisionLender’s proprietary database of 2022 commercial lending deal flow, along with economic data from several public sources, including the Federal Deposit Insurance Corporation (FDIC) and Federal Reserve, in addition to industry research. Q2 PrecisionLender data reflects commercial relationships from more than 150 geographically diverse banks and credit unions in the United States, ranging in size from small community banks to top 10 U.S. institutions. The report also reveals market trends in payment fraud activity based on Q2 Centrix Exact/TMS data from nearly 300 financial institutions across the U.S.

The findings from the report reveal five key takeaways:

  • Economic outlook for 2023 is uncertain: Although some economic indicators point to a recession, the resilient job market signals it will look different from recessions in the past.
  • Banks are bracing for downturns: Commercial banks are stepping up loan loss provisions despite consistently strong credit quality.
  • Renewed focus on deposits: Loan demand outpaces deposit growth, leading to a rise in deposit betas and intensifying competition.
  • Digital reaches deep into financial institutions: Fintech partnerships and a focus on small business experiences top the list.
  • Innovation in payments presents an opportunity: Digital advancements such as real-time payments, integrated payables, and API integration to key systems like ERP will help financial institutions of all sizes compete.

“The findings of this year’s report reinforce the notion that the commercial banking market is at a pivotal point in its evolution,” said Thollesson. “However, bankers are accustomed to dealing with these cyclical changes and have an opportunity to position themselves as trusted advisors for their clients to help them thrive while the market navigates unchartered waters.

Click here to learn more and register for the 2023 State of Commercial Banking webinar. All registrants will receive a copy of the report following the webinar.

To learn more about how Q2 delivers simple, smart, end-to-end banking and lending solutions for commercial financial institutions, visit: https://www.q2.com/commercial.

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