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-: Our economic future is murky.
Will interest rates continue to rise?
How long will they stay elevated?
Will there be a recession?
Deep or mild?
Prolonged or short?
What geopolitical or natural force will pop up next?
Yet a few things are certain.
The era of easy money is over, and there is a set
of actions that financial institutions can take
to position themselves well for whatever comes next.
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Even as rising rates boost profits in the short term,
the uncertainty of what's around the corner
is making financial institutions and investors cautious.
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Investors are expressing concern
about the potential for credit losses
but banks can take control of the situation
by leveraging AI and mining the transaction data they have
on their customers
to identify clients in financial distress sooner
and take supportive and corrective actions more quickly.
This will mean investing in technology
and streamlining workflows to automate credit processes
for less risky customers
and flag risky credits that require manual intervention.
Financial institutions that do this will be able
to create lasting competitive advantage.
There are several no-regret actions to take
to ensure future success.
Continue and accelerate investments
in digital to provide that superior customer experience.
Leverage personalization to build greater engagement
with your customers and drive loyalty,
leverage M&A in order to acquire digital talent
that's going to be critical for the future.
Review your pricing structure and price points
with customers to ensure you're being compensated
for the value that you provide.
And take a clean-sheet,
zero-based approach to reviewing your cost structure.
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