Business Barometer webinar: Umpqua Bank leaders discuss the economy, AI, fraud and more

Umpqua Bank conducts a survey each year of business leaders nationwide to get their take on key business issues and assess their plans for the year ahead. Since 2019, the Business Barometer has proved an insightful tool for the bank and customers alike.

At a recent webinar, bank leaders got a chance to dive into the 2024 report data and add their valuable insight. The event panel included Kathryn Albright, Head of Global Payments and Deposits; Richard Cabrera, Head of the Commercial Banking Division; and Dave Hansen, Director of Retail Banking.

The economy, AI and fraud were all hot topics of conversation. 

ECONOMY

The survey found that there is a growing divide among small and middle market businesses on their take on the economy. 68% of middle market business said the economy is good or excellent; only 29% of small businesses did.

Why the divide?  Part of what we are seeing is the lingering impact of the pandemic, said Dave Hansen. There was a lot of liquidity pumped into the economy through various stimulus programs and many smaller businesses were operating comfortably in the years that followed. But the wind down from the pandemic, plus increased inflation, has worsened their sentiment. Middle market companies, by contrast, have made their pivots in years prior and are enjoying the benefits.

“People are having to be honest; can we make a go of it?” said Hansen.

The interest rate environment, which has eased some since the study was completed, remains top of mind for many businesses. Richard Cabrera said he expects that as rates come down there will be an increase in capital investment and mergers and acquisition activity.

“At the beginning of the year, there was a wait-and-see attitude,” said Cabrera. “Today we have a little more clarity.”

GENERATIVE AI

The survey found businesses have increased interest in investment in AI. 42% of middle market companies said they are moving quickly with broad implementation and another 36% were implementing in some other fashion.

“I think we are really at the forefront of how to apply AI to a business,” said Cabrera. 
Bank leaders said many are using AI to improve efficiency, such as supporting back-office functions.

Small businesses were a bit more skeptical but 60% said they are at least doing some research and pilot studies. But some may already be using AI and not realizing it, said Hansen. He gave the example that a construction company’s ability to rapidly check square footage or assess material needs may be using software that is using AI.

As people become more familiar with the technology, they will be looking for new ways to employ it at their business. He pointed to low-cost but high return opportunities, such as using AI to analyze your advertising spending to better target customers.

FRAUD

“Fraud not only remains a significant issue but continues to increase year after year,” said Kathryn Albright.

She cited recent statistics from The Association of Financial Professionals, which found that 80% of businesses reported a fraud attack in the last 12 months; that’s up 15% from the year prior.

Albright said it is pervasive. She pointed to one example of a check payment that was intercepted. The criminal “washed” the check, changing the payee and depositing into a fraudulent account, resulting in a $75,000 loss. The victim put a Positive Pay service in place and was able to intercept and stop another potential high-dollar loss almost immediately.

These services, available through most banks, can help reduce risk. That’s particularly important as more businesses use instant payments.

“The speed at which things move can be a great thing,” said Hansen. “But the speed at which things move in the fraud arena is very scary.”

Albright and her colleagues agreed that businesses should keep their security top of mind. And they should look at any means to install checks and balances, whether that is internally, through bank services or both.

“The vulnerability of an attack is very, very real,” said Cabrera.

To watch a replay of the full webinar, see the video below. Or you can download the Business Barometer report on our website.