Report reveals commercial banking trends and
the role technology investments play in addressing industry talent
challenges, strengthening business banking relationships and
improving back-office efficiency
Q2 Holdings, Inc. (NYSE:QTWO), a leading provider of digital
transformation solutions for banking and lending, will release its
State of Commercial Banking January 2024 Market Analysis report
following the State of Commercial Banking webinar, which will take
place on Thursday, February 8, at 12:30 p.m. CST. The report is an
annual review of major trends in the commercial banking industry,
based on Q2’s proprietary databases, from the previous 12 months.
In addition, it looks at the challenges and opportunities ahead in
the coming year. The report’s findings and exclusive insight into
commercial banking market trends and predictions will be shared
during the webinar.
“The commercial banking market is at a pivotal point in its
evolution,” said Gita Thollesson, manager, Strategic Advisory
Services, Q2. “Last year, bankers focused on navigating uncharted
waters as they faced macro-economic challenges. In 2024, with
regulatory changes on the horizon and technology advancing at
lightning speed, it is more important than ever to prioritize
strategic foresight and adaptability to prepare for an uncertain
future.”
This report is based on findings from Q2 PrecisionLender’s
proprietary database of 2023 commercial lending deal flow, along
with economic data from several public sources, including the
Federal Deposit Insurance Corporation (FDIC) and Federal Reserve,
and industry research. Q2 PrecisionLender data reflects commercial
relationships from more than 160 geographically diverse banks and
credit unions in North America, ranging in size from small
community banks to top 10 U.S. institutions.
Key Takeaways from the Report:
- Liquidity management takes center stage: Deposit growth
remains an industrywide challenge. Scarce liquidity is leading to
supply-side contractions, while elevated interest rates are slowing
loan demand;
- Regulatory changes are expected to impact capital: Even
though the final form of Basel III Finalized hasn’t been
determined, it’s already leading bank treasurers and capital
subject matter experts to rethink capital strategy and
pricing;
- Higher rates are driving repricing risk on maturing
deals: Interest rate hikes have driven a shift toward floating
rate structures and significantly increased the repricing risk on
maturing fixed-rate deals;
- There’s a renewed focus on automation and systems
integration: A need for greater back-office efficiency in
mid-size to large businesses is driving demand for more automation
and integration between their banking and back-office systems;
- Technology is helping bridge the talent gap: The talent
shortage is hindering financial institutions’ ability to compete
and win, and they are looking to technology to help bridge the gap
for less experienced employees; and
- Opportunities exist to drive deposit growth from small
businesses: Small businesses can be a potential source of
deposit growth if financial institutions target and nurture those
relationships effectively. Technology advancements are making it
more cost-efficient to do so.
Click here to learn more and register for the 2024 State of
Commercial Banking webinar on Thursday, February 8, at 12:30 p.m.
CST. All registrants will receive a copy of the report following
the webinar.
Join Thollesson and report co-writer Debbie Smart, senior
product marketer for Q2, for a related session at the Acquire or Be
Acquired (AOBA) conference today, January 29, at 2:25 p.m. MST.
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.
About Q2 Holdings, Inc.
Q2 is a leading provider of digital banking and lending
solutions to banks, credit unions, alternative finance companies,
and fintechs in the U.S. and internationally. Q2’s comprehensive
solution set allows its customers to better onboard, grow and serve
their consumer, small business, and corporate clients.
Headquartered in Austin, Texas, Q2 has offices throughout the world
and is publicly traded on the NYSE under the stock symbol QTWO. To
learn more, please visit Q2.com. Follow us on LinkedIn and X to
stay up to date.
Forward-looking Statements
This press release contains forward-looking statements,
including statements about: increasing pressure on net interest
margin; financial institution focus on developing and executing
strategies to foster primacy and drive deposit growth; financial
institutions commitment to creating a collaborative environment for
treasury and loan officers; the ability of cross-sell combined with
treasury to generate additional return on equity; banker
conservatism in pricing decisions; trends and stress impacting the
office sector; the importance of active portfolio management in
mitigating risk and maximizing risk-adjusted returns; the
importance of cross-selling, focusing on fee-based business and
relationship expansion; the future impact on net interest margin of
future interest rate changes; and, the importance for financial
institutions to remain nimble and embrace collaboration between
treasury and loan officers while also focusing on cross-sell
opportunities to deepen client relationships and compete. The
forward-looking statements contained in this press release are
based upon Q2’s historical performance and its current plans,
estimates, and expectations and are not a representation that such
plans, estimates or expectations will be achieved. Factors that
could cause actual results to differ materially from those
described herein include risks related to: (a) uncertainties in the
banking and financial services industries, including as a result of
recent bank failures, and the potential impacts on Q2’s customers'
prospects and Q2’s business sales cycles, Q2’s prospects' and
customers' spending decisions, including professional services
which are more discretionary in nature, and the timing of customer
implementation and purchasing decisions; (b) the risk of increased
or new competition in Q2’s existing markets and as Q2 enter new
markets or new sections of existing markets, or as Q2 offer new
solutions; (c) the risks associated with the development of Q2’s
solutions and changes to the market for Q2’s solutions compared to
Q2’s expectations; (d) quarterly fluctuations in Q2’s operating
results relative to Q2’s expectations and guidance and the accuracy
of Q2’s forecasts; (e) the impact that inflation, rising interest
rates, an economic stagnation or slowdown in the economy, or
challenges in the financial services industry, financial markets
and credit markets have had to date or in the future could have on
account holder or end user, or End User, usage of Q2’s solutions,
including the promotion and adoption of Q2’s Helix and payment
solutions, and on Q2’s customers' prospects and Q2’s business sales
cycles, Q2’s prospects' and customers' spending decisions,
including professional services which are more discretionary in
nature, and the timing of customer implementation and purchasing
decisions; (f) the risks and increased costs associated with
managing growth and the challenges associated with improving
operations and hiring, retaining and motivating employees to
support such growth, particularly in light of the macroeconomic
impacts of increased employee turnover, labor shortages, wage
inflation and extreme competition for talent; (g) the risks
associated with Q2’s transactional business which are typically
driven by end-user behavior which can be influenced by external
drivers outside of Q2’s control; (h) the risks associated with
effectively managing Q2’s cost structure in light of the
challenging macroeconomic environment, challenges in the financial
services industry and from the effects of seasonal or other
unexpected trends; (i) the risks associated with the general
economic and geopolitical uncertainties, including the heightened
risk of state-sponsored cyberattacks on financial services and
other critical infrastructure, and continued or increased inflation
partially driven by increased energy costs or other unpredictable
economic impacts that have and may continue to negatively affect
demand for Q2’s solutions; (j) the risks associated with managing
Q2’s business in response to continued challenging macroeconomic
conditions, challenges in the financial services industry and any
anticipated or resulting recession; (j) the risks associated with
accurately forecasting and managing the impacts of any
macroeconomic downturn or challenges in the financial services
industry on Q2’s customers and their end users, including in
particular the impacts of any downturn on financial technology
companies, or FinTechs, or alternative finance companies, or
Alt-FIs, and Q2’s arrangements with them, which represent a newer
market opportunity for us, a more complex revenue model for us and
which may be more vulnerable to an economic downturn than Q2’s
financial institution customers; (k) the challenges and costs
associated with selling, implementing and supporting Q2’s
solutions, particularly for larger customers with more complex
requirements and longer implementation processes, including risks
related to the timing and predictability of sales of Q2’s solutions
and the impact that the timing of bookings may have on Q2’s revenue
and financial performance in a period; (l) the risk that errors,
interruptions or delays in Q2’s solutions or Web hosting negatively
impacts Q2’s business and sales; (m) the risks associated with
cyberattacks, data and privacy breaches and breaches of security
measures within Q2’s products, systems and infrastructure or the
products, systems and infrastructure of third parties upon which Q2
relies and the resultant costs and liabilities and harm to Q2’s
business and reputation and Q2’s ability to sell Q2’s solutions;
(n) the difficulties and risks associated with developing and
selling complex new solutions and enhancements with the technical
and regulatory specifications and functionality required by Q2’s
customers and relevant governmental authorities; (o) regulatory
risks, including risks related to evolving regulation of artificial
intelligence, or AI, machine learning and the receipt, collection,
storage, processing and transfer of data; (p) the risks associated
with Q2’s sales and marketing capabilities, including partner
relationships and the length, cost and unpredictability of Q2’s
sales cycle; (q) the risks inherent in third-party technology and
implementation partnerships that could cause harm to Q2’s business;
(r) the risk that Q2 will not be able to maintain historical
contract terms such as pricing and duration; (s) the general risks
associated with the complexity of Q2’s customer arrangements and
Q2’s solutions; (t) the risks associated with integrating acquired
companies and successfully selling and maintaining their solutions;
(u) litigation related to intellectual property and other matters
and any related claims, negotiations and settlements; (v) the risks
associated with further consolidation in the financial services
industry; (w) the risks associated with selling Q2’s solutions
internationally and with recent expansion of Q2’s international
operations; and (x) the risk that Q2’s debt repayment obligations
may adversely affect Q2’s financial condition and cash flows from
operations in the future and that Q2 may not be able to obtain
capital when desired or needed on favorable terms.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240129059101/en/
MEDIA CONTACT: Carly Baker Q2 Holdings, Inc. 210-391-1706
carly.baker@q2.com
INVESTOR CONTACT: Josh Yankovich Q2 Holdings, Inc.
512-682-4463 josh.yankovich@Q2.com
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