With all of the uncertainty in the markets, high inflation and gas prices, rising interest rates, Cascade Business News reached out to some of our local banking professionals to get their perspective on the coming months and year.
We thanks them for sharing and hope that you, the reader, will find some insights to help your business grow and thrive in this unique time.
Stephen Wymer, Central Oregon Area Manager, OnPoint Community Credit Union, onpointcu.com
Coming out of the mask mandates, are your clients feeling a surge in business overall?
We have heard from our business members that they are cautiously optimistic about getting back to business as usual. Central Oregon experienced a flood of new residents during the pandemic so businesses have generally stayed busy, but struggle to compete for employees. Large, global companies are now paying employees almost $25 per hour, making it difficult for smaller, homegrown businesses to keep up with the competition.
Will interest rate hikes affect borrowing? Are certain industries affected more than others?
Yes, the increase in interest rates is going to affect borrowing. First and foremost, they will impact home and commercial mortgages as rates have increased rapidly in recent weeks.
Over the long run, industries that invest in large assets will also begin to feel the pain. For example, when a manufacturer needs to purchase equipment — if they can get the equipment due to supply chain woes — they usually need a loan, and rates are increasing as we speak.
Do you see the U.S. going into recession this year?
While I don’t have a crystal ball, it is clear there are a lot of economic pressures at play, from historic inflation and increasing interest rates to supply chain issues that could take us down that path.
What are the biggest challenges facing the banking/credit union community?
Nearly every sector is struggling to find and retain quality employees, and I see that as our biggest hurdle. A challenge more specific to financial services is adapting to new technologies and alternative service delivery channels, which are both changing at a rapid pace. Our increased reliance on technology has also increased rates of fraud in our community. OnPoint has invested heavily in fraud prevention to protect our members and the community through this time of increased cybercrimes.
What is changing in the industry?
Digital transformation is causing a considerable shift in how people bank and not entirely for the better. In 2021, banks closed 3,324 branches, a new industry record, according to National Public Radio (NPR). Many of these closures occurred primarily in low- and moderate-income areas, leaving many communities under- or unbanked. While many financial institutions are closing local branches, OnPoint opened 20 new branches last year, which is more than any other financial institution opened in the United States.
Our growth has meant greater access and convenience for our members, as we continue to hear they value the in-person experience at our branches. Our expansion has also enabled us to invest more in the local communities we serve, resulting in 157 new jobs and more than $2.2 million in donations to 304 area nonprofits, a new charitable giving record for OnPoint.
What are your goals for 2022?
Last year was a big year for us as far as growth and giving, and we’re continuing to build on that foundation in 2022. We look forward to expanding our reach within the communities we serve as we approach key milestones, such as 500,000 members and $10 billion in assets.
We also hope 2022 will be a year of collaboration, where business leaders, elected officials and corporations come together to solve the issues our communities are facing like affordable housing, equity and climate change.
My message to the Central Oregon business community is to get back to the basics of taking care of your customers and your employees, and they will stick with you. Also, know that you don’t have to navigate these challenging economic times alone. Reach out to your financial institution to find out what resources they offer and leverage as many of them as possible. At OnPoint, we work closely with our small business community to support them in starting, managing and growing their businesses. This includes working one on one to set goals, create roadmaps and determine the perfect financing solution for their unique needs. If you’re interested in learning more, we encourage you to contact one of our three branches in Central Oregon to discuss how we can help you and your business achieve your goals.