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TULSA WORLD
Sunday, February 23, 2020 O23
OUTLOOK2020 BANKING
More banks adapting to fit needs of consumers Banks are having to rebrand and evolve to cater to a younger generation From Staff Reports
As the decades have passed, so, too, have the ways of traditional banking. Trips to the neighborhood Savings and Loan have been largely replaced by taps on an iPhone or computer keyboard. The folks at Tulsa-based Enacomm are well-versed in the evolution of the banking sector. Enacomm is a FinTech provider of intelligent interactions and customer authentication technologies for banks, credit unions and credit card and payments companies. “Tulsa is a great demographic,” said Shawn Hughes, president and chief operating officer at Enacomm. “You have the presence of the most modern banking, like a Wells Fargo or a Bank of America, and you very well could have a community bank on the same block. “When you look across America, community banks and
credit unions have taken on the lion’s share in the United States in the form of the families and businesses. It’s not the mega banks. But these community banks and credit unions historically have not been able to take on the expense of the latest and greatest tech. The landscape is changing big-time.” Customers younger than 40 prefer bigger banks, according to a 2019 retail banking satisfaction study by J.D. Power and Associates, a data analytics and consumer intelligence company. At the time of J.D. Power’s 2009 study, the 10 largest U.S. retail banks managed 39% of industry deposits and 26% of branch bank offices. Currently, they manage 48% of deposits and 31% of branches. Also in 2019, 53% of retail banking customers used mobile banking. Challenger banks, such as Chime, are carving their niche in the industry, as well. Offering lower overhead costs and no physical branches, these online and mobile-only banks have perks that appeal to the younger crowd. FICO, a data analytics company fo-
U.S. consumer banking at a glance Median savings account balance: $7,000 Median checking account balance: $3,400 Percentage of customers who regularly use online and mobile banking: 71% online, 43% mobile Times an average U.S. customer uses debit card: 22.8 times a month Bank operating most branches in the United States: Wells Fargo, 6,087 Percentage of Americans without a bank account: 7% Source: Valuepenguin.com
cused on credit scoring services, found in 2016 that millennials are two to three times more likely to switch banks than other generations. The company also found that 45% of millennials cited high fees as their reason for changing. “These new challenger banks are popping up, and they are signing up millions of people,” said Mike Boukadakis, CEO of Enacomm. “Where are those people coming from? They are coming from community banks and credit unions.” The consumers also are changing. Financial experts predict that baby boomers, those born between about 1944 and 1964, are likely to transfer tens of trillions in wealth to younger generations within the next 25
years. “It’s a fundamental shift on the money assets,” Boukadakis said. To draw more people into physical branches, some banks are enhancing the experience. Vast Bank in Tulsa is one such example. Formerly Valley National Bank, Vast Bank changed its name in 2019 in a rebranding effort to emphasize evolving customer expectations. It followed that up with the construction of a new 100,000-square-foot, mixed-use headquarters and bank branch downtown at 110 N. Elgin Ave. Much more than a place to deposit and borrow money, the structure will feature an artists’ space, several restaurants and a coffee and beer establish-
ment. “You are going to see more of the community banks offer that type of environment,” Boukadakis said. Sector transformations notwithstanding, plenty of room for growth remains for all kinds of financial institutions, he said. “With technologists like Enacomm affording community banks and credit unions the opportunity to have product parity, they are going to be able to compete with the larger box banking companies like Chase and Bank of America,” Boukadakis said. “They are going to be able to compete with this new challenger bank. Will they be able to keep their deposits? Yes. Will they be able to add new customers because they have new technology? Yes. “I believe the community bankers as a whole realize the issues and problems they have, and with technology companies adopting ways to be competitive, they will stay alive and they will flourish. They have to morph. If you’re not growing and you’re not changing, you’re dying.”
HOUSING
‘Exciting year’ expected for housing starts Area home construction in 2019 jumped 17.6% over the previous year From Staff Reports
A perfect cocktail of factors helped the Tulsa area experience a banner year for housing. “We’d been seeing positive numbers all year long,” said Mike Fournier, president of the Home Builders Association of Greater Tulsa. “We were kind of expecting it to be over 10% from the previous year.” Tulsa-area home construction in 2019 jumped 17.6% over the previous year. The number of housing starts (3,080) also were the most since 4,303 were recorded in 2007, according to data from Tulsa-based New Orders Weekly. “You have consumer confidence at a 40-year high and you have nationwide unemployment at a 57-year low,” said Fournier, owner of The Sonrise Cos. “You have those items working in place with the low interest rates. There’s just a huge resurgence of new types of building. Looking at 2020, it looks like it’s going to be another exciting year.” Broken Arrow and the original midtown Tulsa area are going through a “massive resurgence with infills,” he said. Broken Arrow led in housing starts last year with 589, followed by Tulsa (564), according to New Orders Weekly. Neighborhoods such as Stone Canyon east of Owasso are “blowing the socks off” building numbers, Fournier said. “People are seeing new styles and price ranges that are affordable for any income level,” he said. “There are a large selection of locations and types and prices of homes to choose from.” He added that many Tulsa remodeling companies had a record year in 2019. A couple of national kickstarters have kept home building at a brisk pace. Thanks to the recent passage of a new tax extenders bill, the energy efficient home credit, which provides eligible
Workers construct a house in south Tulsa.
Tulsa-area housing starts Totals
2019: 3,080 2018: 2,618
By city (county) in 2019
Broken Arrow: 589 Tulsa: 564 Unincorporated Wagoner County: 423 Unincorporated Rogers County: 258 Bixby: 232
contractors with a $2,000 tax credit for each energy efficient dwelling unit, has been retroactively extended for 2018, 2019 and through the end of 2020. Also, in September 2019, the treasury and the Federal Housing Finance Agency (FHFA), acting as conservator to na-
TOM GILBERT/Tulsa World file
tional mortgage financiers Fannie Mae and Freddie Mac, announced amendmentsto the respective Senior Preferred Stock Certificates that will permit Fannie Mae and Freddie Mac to retain earnings beyond the $3 billion capital reserves previously allowed through the letter agreements of 2017. Fannie Mae and Freddie Mac now are permitted to maintain capital reserves of $25 billion and $20 billion, respectively. “Fannie Mae and Freddie Mac coming back from receivership and being able to have accumulated assets. ... That’s going to open up a lot more opportunities for lenders using them as a source for financing for homeowners,” Fournier said. “Every sign is just so exciting for the housing industry right now.”
There still is room for improvement, however. Fifteen percent of households in and surrounding downtown Tulsa are extremely cost-burdened, meaning more than 50% of the payer’s income goes toward housing. That information was contained in the draft of a housing market demand study and strategy presented in January to the Tulsa Development Authority. The city commissioned a housing study in 2010, and since that time, $1.4 billion in downtown building permits have been filed, the study found. Over the next decade, it is estimated that 60% of new jobs in the region will pay less than $35,000, highlighting the need for affordable rents ($850 a month or less). To address issues such as
PARTNERS IN PROGRESS
those in the single-home and multifamily housing markets, more workers are needed, Fournier said. Build My Future is a program designed to inspire young people to pursue careers in the skilled trades. “When you realize that the national average age of builders is 58, we are working so diligently to get more skilled trades for kids that are in high school, getting them into the vo-tech schools,” he said. “This is something that takes decades to do. “It’s going to be our No. 1 goal to be able to sustain and even improve on these numbers. When you have a limited pool of skilled workers available, there is a maximum that you can do until you get a large pool of skilled trades to work from.”
