Well, 2014 is coming to a close. It’s that time when MyBankTracker reflects on the banking trends that we predicted would take focus in the past year. See how accurate — or inaccurate — we were at forecasting the trends in banking.
Prediction: Branches get smaller, smarter – CORRECT
In the past few years, the idea of branch banking has evolved greatly. Last year, we saw big banks like Chase, Wells Fargo and PNC experiment with branches that were smaller and more focused on digital technology. This year, we believed that these next-generation branch concepts would catch fire and more banks would consider shrinking their branches.
We were right, as major banks like TD Bank, SunTrust Bank and Regions Bank have also revealed that they’re piloting such branches. Compared to their typical branches, these new branches tend to dispel the idea of tellers. Instead, bankers roam the branch floor to educate and assist customers with a wide range of products and services.
Meanwhile, ATMs got smarter. They can disperse bills in multiple denominations down to a single $1. Furthermore, some ATMs allow customers to video-chat with live tellers.
Prediction: Deposit rates won’t improve much – CORRECT
In the past couple of years, the Federal Reserve (our central bank) said that it will look at the country’s employment rate to judge when the economy is ready for a rate increase. It turned out that the jobs market wasn’t the only factor that the Fed was looking at — it also cared deeply about the inflation rate.
We expected that the multiple factors required to justify a rate increase would not appear. Therefore, we predicted only a very small rise in deposit rates — primarily savings and certificates of deposit (CDs).
|Deposit rate||Dec. 2013||Dec. 2014|
|National savings rate average||0.28% APY||0.28% APY|
|National 1-year CD rate average||0.47% APY||0.48% APY|
|National 5-year CD rate average||1.12% APY||1.30% APY|
Prediction: Mobile wallets race truly begins – CORRECT
Last year, we felt that mobile wallets were preparing themselves to make a major push for widespread adoption. Google Wallet, Softcard (formerly Isis), PayPal, Visa and MasterCard were expected to take larger initiatives in an effort to stand out amongst each other.
Generally, we saw no such moves by these mobile wallets. That doesn’t mean we were incorrect in our prediction because Apple Pay happened to launch this year.
As a mobile payment feature that is available through Apple’s new — and very popular — iPhone 6 and iPhone 6 Plus smartphones, Apple Pay arguably received the most buzz upon introduction. In fact, it is partnered with a long list of major banks, credit card issuers and retailers. We believe that Apple Pay has the lead in the race, despite a later launch than its competitors.
However, Apple Pay is facing a hurdle called CurrentC. It’s a another upcoming mobile wallet by retailers. Some of these retailers have chosen to reject Apple Pay transactions as they begin to pilot CurrentC. We’re looking forward to seeing how the clash between these mobile wallets will turn out.
Prediction: More customization, especially on credit cards – WRONG
We love personalization on the products that we own because it makes them unique compared to all the other similar products out there. We were fascinated by the idea that the financial industry would allow consumers like us to customize products so the they’re tailored to how each individual interacts with his or her finances.
For instance, credit cards such as U.S. Bank Cash+ and Huntington Voice would allow cardmembers to choose the types of purchases that would earn bonus rewards. Union Bank offered a checking account that customers could “design” to fit their needs and have the monthly fee vary based on the services that they opted to pay for.
We thought that these customized financial products would show up more in the financial industry. Unfortunately, we were wrong. There weren’t any new products this year that offered such customization capabilities.
Prediction: New mortgage rule has little effect on borrowing potential – CORRECT
In early 2014, the Consumer Financial Protection Bureau enforced a rule that required borrowers to have a debt-to-income ratio of 43 percent in order to qualify for a mortgage. It was designed to prevent the types of defaults that contributed to the last housing crisis.
The rule may be seen as a major obstacle that will stop many Americans from qualifying for a home loan, but we predicted that it wouldn’t pose much of a problem.
Although the mortgage rule hasn’t been in effect for too long, there are early signs that the rules has had no major effect on the approval rates for home loans. According to a research report by Zillow.com, the rules appear to have minimal impact on how most Americans obtain mortgages.
Overall, we did pretty well in predicting some of the trends that happened this year — getting 4 out of 5 correct. Was there a financial breakthrough or trend that wowed you in 2014? Let us know in the comments below.
Stay tuned for our 2015 predictions!