The banking industry has gone through some very rough years, starting back as early as 2007, and it will continue to encounter considerable uphill battles over the unforeseeable future. Many of its challenges resulted from banks’ own actions, regulatory gaps and market pressures, and they were then perpetuated by other world events. Regardless of the drivers, banking will never be what it once was – and that’s not necessarily a bad thing. The bottom line is that the banking industry will evolve in a dramatically different manner.

Think about it. Who five years ago would have guessed that:

One of the largest US banks would have the US government as its largest shareholder
That more than 18 US financial institutions would have had to take loans (in the form of TARP funding) from the government to remain in business
That many of our largest banks no longer exist, after having been forced to sell for pennies on the dollar
Those banks that survived and are in the recovery phase will be taking time to evaluate their market positioning, customer segmentation models, product mixes and risk models for each of their businesses. More regulations have come down from the various regulatory bodies, and more will be coming in an effort to ensure another financial crisis may be adverted in the future. Banks’ customer confidence is coming off an all-time low, while stockholders are looking for their dividends to return.

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