2023 Trends & 2024 Outlook

Join host Tracy Bedeker in this episode, where we reminisce about 2023 and what’s hot in the banking world for 2024.   President & CEO Konni Rodeghier will look into her crystal ball and make some predictions about what’s in store with the interest rate environment, technology and latest products and trends in banking!  Tune in to ensure you know what’s coming in 2024 in the world of banking! 

Transcript

Tracy (00:08):
Welcome to the Feeling is Mutual podcast. I'm your host, Tracy Bedeker, Vice President of Marketing at First Federal Savings Bank. We are a community bank with a mutual charter. If you thought banking was boring, the feeling is mutual. But we're here to take the boring out of banking. In this podcast, we will bring our listeners real life stories and education on financial topics, and it's all going to be delivered in a quick, fun, and interesting format. Happy 2024 everyone. We hope everyone enjoyed the holidays and had a nice safe New Year's celebration, but now we're going to jump into 2024 and all the exciting events and topics that we have awaiting us. I know some people don't think banking is very exciting, but we here at first Federal Savings Bank Think banking is very exciting and we are here to take that boring out of banking today. We have a familiar guest with us and a two time presenter on our, the Feeling is Mutual podcast. We have our very own president and CEO, Konni Rodeghier, who is going to dust off her crystal ball and give us some insight into the banking industry in 2024 and talk a little bit about the year in review in 23. So Konni welcome.

Konni (01:44):
Thank you, Tracy. I'm glad to be back on your show.

Tracy (01:47):
Well, we are certainly thrilled to have you back. Konni, do you just want to take a couple minutes to reintroduce yourself to our listeners?

Konni (01:56):
Sure. My name is Konni Rodeghier. As Tracy said, I'm the president and CEO of First Federal Savings Bank. I've been in this role for two years now. I get excited about banking. It's what we do every day. There's interesting things going on. Interesting things happened last year. Got a big year coming up in 2024, so I think it's very exciting.

Tracy (02:16):
Well, I do too, and I know you especially should be very excited because you were also named as our very first female CEO. How do you like that feather in your cap?

Konni (02:28):
I'm excited that we have an all female management team. Just one of many, a fabulous group of women, a fabulous group of bankers that are leading the

Tracy (02:37):
Well. Very good. Well, you're doing a wonderful job. So Konni, let's just step back for a minute and review 2023. Were there any trends that you saw?

Konni (02:49):
One of the biggest things that I saw that it was going on before 2023, but I think it really exploded in 2023, was that buy now pay later product. You see that has just really taken off. I think it's an interesting niche product with some pros and cons that I think is really

Tracy (03:07):
Interesting. Why don't you review with us maybe some of the pros and cons, whether it is a good product for consumers.

Konni (03:14):
So just to start off with, what is it, and most people probably know, but it is a feature that you can do in shopping where you can pay for your purchase in four or fewer installments instead of paying for it all at once. It's something that you're seeing right there at the checkout and online to choose that option. Whether you'd rather pay for your $500 television set all at once, or whether you'd like to pay for it in four payments, and people are choosing that four payment method and that's buy now, pay later. It's a great little niche because it's something that banks aren't doing as those small, very short-term loans. People are using it. People need that product. So I think that there's definitely some benefits to it, but it comes with some cons as well.

Tracy (03:56):
What are some of those? Well,

Konni (03:58):
Just like any form of credit, you can get overextended, you can have too many of those going at once. You can overuse it. I think consumers have to be very careful of that. There's time to get into a more traditional bank loan product. If you're having a need that's more than a couple of times a year for a major purchase, you should be talking to a bank about a different type of loaning structure. Most traditional buy now pay later, the consumer doesn't pay any financing costs for that. Cost is covered by the retailer, so that's a great thing. But if a consumer is starting to choose products that have a higher interest rate, maybe it's more than four payments and there is some interest to that, then you're maybe starting to get into some areas where you shouldn't. So that would be if you're starting to pay interest in fees on those, there are much better options for that. One of the biggest things is that you're making credit payments, but those are not going to report on your credit history. So if you're trying to establish credit history and get a nice payment pattern, you're better at a traditional banking products. Definitely some great uses for IT consumers. It can be a really good product. Just watch out for those cons.

Tracy (05:02):
Right. Well, great information. That was very informative, so thank you. Well, there are a lot of new products and services that we introduced, and I know those were all very exciting. We had our online loan application and we were able to open up our checking accounts online. So that was really exciting. We like to keep on the cutting edge of technology and make that banking experience seamless for our customers. So Konni, I know in real estate they say location, location, location, but in banking it's interest rates, interest rates, interest rates. So we hear so much about the Fed and interest rates. Where do you see that going this year?

Konni (05:45):
Well, I think that we've seen the Fed finally at their December meeting, say they see the signs are going in the right direction, inflation is cooling, some economic trends are turning, and they actually started talking about lowering rates next year. So we're hearing that. I think that's going to happen. I think they are cautious. They will continue to look for signs. It may not change as fast as people might expect, but I think we're going to see some softening, some lowering of those Fed interest rates next year.

Tracy (06:17):
Well, good. And then how about inventory? I know you're very familiar with the real estate and mortgage and it seems that, I hear a lot of consumers talking about the inventory is low. So is that picking up a little bit

Konni (06:34):
In pockets? But I would say that it is going to continue to be an issue. We know that there's so many people that are locked in at such great mortgage rates that they're reluctant to sell their home and give up their two, two and a half, 3% mortgage rate. So that's had an impact on inventory, but markets always tend to correct themselves. Eventually demand is going to create supply markets will get themselves back in balance, but that continues to be a problem. There are buyers out there and there's not enough homes on the market.

Tracy (07:07):
I am starting to see a lot more people building. Is that another trend that we're kind of seeing?

Konni (07:12):
Absolutely. I think that's still something that's everybody's dream. You want to build that home and have it built for you what you want from scratch. So absolutely, home building is still something that's happening.

Tracy (07:25):
And I know we have a lot of great products for not only first time home buyers, builders, people who are looking to build and your conventional loans as well. Was there anything in 2023 that surprised you? And let me ask another question on top of that. What surprised you in 23 and then what are you most excited about in 2024? Oh,

Konni (07:46):
Okay. So I think one of the things that happened in 2023, maybe early in the year, throughout the year, we really came out of the pandemic and what we saw in our offices that banking in person still matters. We thought, gosh, customers have been retrained. They've been trained not to come into the bank. The pandemic has changed things, and I don't think that's the case. It still matters that your bank is a convenient location, that you can visit them and talk to those bankers when you need to. Maybe you don't need to as frequently as you may have in the past because of all those online tools, but it still matters. And our customers are back in our offices, coming to our events, coming to us when they need something. So I think that was a really pleasant surprise.

Tracy (08:30):
I would agree. I would agree.

Konni (08:32):
Back to banking,

Tracy (08:32):
And I think people were very excited about getting back and seeing people and having conversations. And I think everyone was kind of a little tired of being cooped up in their houses and wanted to get out, go back out for coffee, go out for dinner. So I would agree, and I couldn't agree more about that. Banking is just such an invaluable, I know we take pride in it here at first Federal Savings Bank.

Konni (08:57):
Absolutely.

Tracy (08:57):
Okay. So what are you most excited about in 2024?

Konni (09:02):
I New Year person? Not necessarily a New Year's resolution, but kind of a new year clean slate person. So just being excited about, okay, wipe the scorecard clean. We're starting over, starting fresh, and let's see what the year brings. The rate environment has been a challenge. High rates, we say, well, we don't like high mortgage rates, but we certainly like high investment, high CD rates. So high rates are not necessarily a bad thing, but we need just some sort of balancing and leveling out of those rates. We don't want 'em to be too low, just like we don't want 'em to be too high. So I'm just excited about the reset that a new year

Tracy (09:40):
Brings and making sure we have that nice balance too. Yeah, that's wonderful. Do you see any other trends maybe in technology? Anything that as you are at these seminars, kind of buzz topics?

Konni (09:54):
I think that technology is so important to our industry, to all industries anymore, you have to be mobile, you have to be paperless, you have to have all of those tools just continuing to stay on top of those advancements. Right now it's chat, GT

Tracy (10:10):
GPT

Konni (10:13):
And ai and what are those things? Are they good? Are they used in our industry? And are we on top of whatever those benefits are and whatever tools we have and what we can bring to our customers. We just need to always have our eye on that technology ball and be current with those things.

Tracy (10:30):
Exactly. And making sure that we're feeding the right information to our customers. Absolutely. Because there's so much out there and you could read good and bad. And I think that's the nice thing about First Federal Savings Bank is making sure that we're providing accurate and solid knowledge. Nothing that scares them, but letting them know that we're here to help them navigate that new technology or interest rates, whatever it may be. So I agree. I'm not a big resolutions person either. Not necessarily because I don't keep them for very long, but I agree. I am that person that likes to have that clean slate too, kind of start fresh with new ideas. And so yeah, a lot of exciting things on the horizon. Konni, any last words for our listeners? Well,

Konni (11:19):
I just want to thank them for listening to our podcast. If you're a customer of the bank, wonderful. We appreciate that so much. If you're not, we'd love you to be a customer. We're looking forward to 2024. The bank has some great products. Tracy mentioned some different technologies that we've added. We're always adding things and changing things, doing different things to make our customers banking experience better and to attract new customers. We'd love to see you in our offices.

Tracy (11:45):
Yes, we would. Well, thank you so much again, Konni, and thank you to all of our listeners. From everyone here at First Federal Savings Bank, we want to wish you an exciting 2024 and to reiterate again, remember to tell your friends and family about us, and especially about our feeling is Mutual podcast. We love our listeners, so remember to download our podcast. We have a great library of podcasts that we've already done. Be sure to download wherever you get your favorite podcast. And again, thank you for listening to us. Remember to pop onto our website where you can get great information on all of our products and services. So happy 2024 everyone, and stay tuned to our next podcast.