Battling headwinds in banking and finance

Battling headwinds in banking and finance

2022-07-11T08:39:07-04:00July 6th, 2022|Banking & Finance, Philadelphia|

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Writer: Sara Suarez

2 min read July  2022— Banking and financial institutions are facing headwinds such as inflation, a rising interest rate environment and a challenging labor market. With Invest:, Philadelphia area leaders shared how they’re approaching these various challenges and what their outlooks are for the coming years.

Jim Whitton, SVP, Business Market Leader, Tompkins VIST Bank

We’ve experienced a compression on interest rate margins, but that may begin to alleviate soon. Interest rate hikes are built into the market for the longer term. The interest rate increases are a double-edged sword. As they increase, the market will slow down, potentially leading to an adverse impact. I believe it will be a unique challenge as it’s something we haven’t experienced in 10 years. Talent acquisition is another challenge that is central. The competition for talent is growing, so there is a great pressure to provide beneficial incentives, benefits and salaries to attract, recruit and retain talent. 

Our greatest focus in improving our infrastructure, staying in step with the evolving environment, is to be nimble in how our customers can bank. We’ve built and expanded our online platform by incorporating Lightning Loans, which is an application to apply for small business loans. We’re focusing our energy toward helping small businesses.

 Jamie Tranfalia, Market President and Commercial Sales Leader for Eastern Pennsylvania /Southern New Jersey Market, KeyBank

The best way to describe what the future of work will like for our organization is “hybrid.” When the dust settles, I believe we’re going to have a mix of people working from home, working from the office and people who will do both. We’re taking into consideration what our employees want, which many times is flexibility. If we’re going to retain and attract the best talent, we need to provide that. That being said, like all other companies we want to retain our culture and the best way to do that is getting people in the office, especially for younger people who don’t fully grasp the bank or culture yet. 

During the last two years, the economy has been stronger than most people have thought. However, we’re also facing some headwinds such as inflation and a rising interest rate environment. But through it all I think we’re going to do well. The economy is strong, will remain strong and Philadelphia will play a significant role in increasing the region’s economic base through growth in life sciences, technology, port activity and manufacturing and distribution.

Maxine Cuffe, Vice President & Director of Global Strategies, The Haverford Trust Company

It has been interesting because COVID has made people think more about their financial future and to expect the unexpected. When the pandemic started none of us expected the markets to have a huge correction and then come back so quickly. But this allowed people to evaluate if they were investing appropriately. When the markets fell it gave people the opportunity to think about if they had the right asset allocation, if they were taking too much investment risk, and whether they had enough of a cash cushion to cover an emergency.  Many older workers figured they had enough investments and took early retirement during the pandemic. 

When we consider the current market, the current inflation rate of 8% has sparked people to think and plan more for their future. The landscape has changed significantly as home prices are 20% more expensive than before the pandemic, and mortgage rates have gone up too. Additionally, because of the current health risks, people are taking time to be more organized, have their financial and legal documents in place, and consolidate their assets in case a worst-case scenario happens again. We are here to help them and support them with their needs, in their unique situations.

Thomas Williams, CEO, Partner and Senior Wealth Advisor, Domani Wealth

The outlook is positive and optimistic. The last three years have been good, but the next three will be challenging most likely. We will see an increase in interest rates, which may create an unusual shift in the markets. The potential lack of positive performance contribution from bonds could create a challenging performance. At the end of the day, people will need more financial and consulting advice due to turbulent times. 


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