Despite predictions of a bear economy, banks and credit unions are bullish on their prospects for growth in 2023, according to surveys by Wipfli, a Milwaukee-based accounting and advisory firm.

From October 25 to November 5, 2022, Wipfli conducted an online survey of 249 bank executives across 39 states, who were selected through its database and a partner panel company, Op4G. A third of respondents (29%) said their bank had assets under $500 million; 45% said their bank had assets between $500 million and $3 billion; and 28% said their bank had assets over $3 billion. The results were analyzed in December and released at the end of January 2023.

Nearly every bank surveyed said they expected to grow in the next 12 months, with 70% of banks forecasting a growth of 5% or more. Banks with more than $3 billion in assets, categorized as regional banks, reported even higher confidence, with 94% expecting to grow at least 5% or more this year.

Banks said their immediate priority is to close the talent gap, followed by improving digital engagement, and creating new revenue streams. Respondents said they’re also pursuing digital transformation projects to reduce costs and their reliance on human labor.

“Adding new revenue streams while improving engagement are only part of the equation,” Anna Kooi, who leads Wipfli’s financial services practice, said in the release. “Current economic conditions are requiring banks to cut costs and increase efficiency. Our research shows banks are having the hardest time filling front-line, commercial and retail roles, while larger banks are also struggling to find digital and IT workers. To fill the gap, banks are increasing wages, benefits and perks, and creating career paths for employees.  2023 is the year of the people plan.”

More than half of banks surveyed said they introduced instant payments services in the past three years. Another 47% added automated investing or robo-advisory services, which helps expand investment and wealth advisory services to the mass market.

“Twenty percent of consumers use at least one next-generation payment method,” Kooi said in the release. “This shift in consumer payment preferences puts revenue streams at risk for banks.”

In a separate report by Wipfli, 69 credit unions surveyed across 27 states also expressed confidence as they headed into 2023. A majority of respondents (81%) said they expected to grow 5% or more in the next year, and 95% said they are planning to acquire another financial institution.

Credit unions said improving digital member engagement is their top strategic priority for the New Year, followed by talent management, creating new revenue streams, and pursuing digital efficiencies.

“Credit unions need seamless and simple digital experiences, along with competitive financial services, to attract and serve younger members,” Kooi said in the release. “With ambitious growth plans, credit unions need to aggressively address the talent gap and digital transformation. In addition, credit union leaders need to understand all the risks associated with an investment, including environmental and social factors. Investments and strategies that aren’t in sync with the market won’t perform well. ESG can steer credit unions toward better, longer-term decisions.”