Does a 7.3% boost in earnings give you any indication of how the banking industry is doing holistically? The increase in earnings was mainly due to a $7.8 billion (4.8%) increase in net operating revenue (the sum of net interest income and total non-interest income), the biggest since the fourth quarter of 2009.
The good news is that almost two-thirds of the 6,589 insured institutions reporting (62.9%) had year-over-year growth in quarterly earnings. However, although the proportion of banks that were unprofitable during the third quarter fell to 6.4% from 8.7% a year earlier, it does imply that there are still problems out there in a number of regions of the country.
A profitable banking industry is good for business for all involved. It means rates which are more competitive, increased demand for loans at a market level and openness to investment in technology by the banks. This of course is fantastic news for solution providers and vendors because when banks are willing to invest in new technologies, vendors are more active and willing to take risks and invest in new concepts and product improvements.
As for check processing, there continues to be interest in using technology to drive operational benefits. I attended a recent FIS Image Solutions Annual Conference in OKC, and found the hunger for efficiencies to be surprisingly strong! The challenge is set for us all to deliver on these. We are doing our part with the new release of check recognition with Accura XV and V100!