{"id":9288,"date":"2021-07-12T12:30:53","date_gmt":"2021-07-12T18:30:53","guid":{"rendered":"https:\/\/www.shieldagency.com\/blog\/?p=9288"},"modified":"2025-01-23T09:40:18","modified_gmt":"2025-01-23T15:40:18","slug":"retail-banking-bonds-and-bitcoin-3-financial-institution-trends-to-watch-in-2021","status":"publish","type":"post","link":"https:\/\/www.shieldagency.com\/blog\/retail-banking-bonds-and-bitcoin-3-financial-institution-trends-to-watch-in-2021\/","title":{"rendered":"Retail banking, bonds, and Bitcoin: 3 financial institution trends to watch in 2021"},"content":{"rendered":"\n<p><a href=\"https:\/\/business.libertymutual.com\/insights\/retail-banking-bonds-and-bitcoin-3-financial-institution-trends-to-watch-in-2021\/\" target=\"_blank\" rel=\"noopener\" title=\"Liberty Mutual \">Liberty Mutual <\/a> | financial institution | Business Insurance | <\/p>\n\n\n\n<p>\u201cThe banking industry can uniquely act as a primary source of stability,\u201d McKinsey journalists wrote in&nbsp;<a href=\"https:\/\/www.mckinsey.com\/industries\/financial-services\/our-insights\/stability-in-the-storm-us-banks-in-the-pandemic-and-the-next-normal\" target=\"_blank\" rel=\"noreferrer noopener\">an article<\/a>&nbsp;on U.S. banking and the pandemic in May 2020. Despite the fluctuating economy, financial institutions rose to meet the challenges posed by the pandemic. They stayed strong for the last year and a half, acting as a stabilizing force for both national and local economies\u2014and that stability makes them an attractive market for sureties in 2021 and beyond. But stability isn\u2019t permanent. In this piece, we\u2019re investigating three trends that will likely shape financial institutions and their relationships with surety agents this year.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-3-surety-trends-for-financial-institutions-in-2021\">3 surety trends for financial institution in 2021<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-1-banks-expand-in-underserved-communities\">1. Banks expand in underserved communities<\/h3>\n\n\n\n<p>In the surety underwriting space, larger financial institutions remain strong, particularly in major metro areas like New York City. While the pandemic has shifted the need for retail space across the industry, many banks continue to grow their retail footprint in select growth markets and underserved communities. According to a&nbsp;<a href=\"https:\/\/www.spglobal.com\/marketintelligence\/en\/news-insights\/latest-news-headlines\/big-us-banks-mount-branch-building-spree-in-expansion-markets-62468978\" target=\"_blank\" rel=\"noreferrer noopener\">recent article from S&amp;P<\/a>, many large consumer banks experienced a net growth in retail space\u2014particularly ATM locations\u2014in select urban areas, despite a net decline in retail space for financial institutions nationwide.&nbsp;<a href=\"https:\/\/www.jpmorganchase.com\/content\/dam\/jpmc\/jpmorgan-chase-and-co\/investor-relations\/documents\/annualreport-2020.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">JP Morgan\u2019s 2020 Annual Report<\/a>&nbsp;reflects that trend. The report states that the bank will open \u201c16 new community branches in traditionally underserved neighborhoods and hire 150 community managers by 2022\u2026 Another 100 new branches are being opened in low- to moderate-income communities across the United States as part of the firm\u2019s market expansion initiative.\u201d<\/p>\n\n\n\n<p>For surety underwriters, this trend offers the opportunity to provide major consumer banks with several types of bonds:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Mechanic\u2019s lien bonds, which protect contractors that have filed a lien by guaranteeing that any payment that is due to them (including interest) will be paid should they win the case.<\/li>\n\n\n\n<li>Site improvement bonds, which protect the local government by guaranteeing that the improvements will be done in accordance with the applicable regulations.<\/li>\n\n\n\n<li>Utility bonds, which protect utility companies by ensuring the banks pay for their utilities on time<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-3-the-rise-in-court-bonds\">3. The rise in court bonds<\/h3>\n\n\n\n<p>In the aftermath of Covid, many industries\u2014not just financial institutions\u2014will likely experience a greater need for appeal bonds. A type of court bond, surety firms offer these bonds to guarantee payment of monetary damages from civil lawsuits during and after the appeals process.<\/p>\n\n\n\n<p>The need for additional appeal bonds across industries is due primarily to pandemic-related litigation. One study by an analytics company tracking the rise in Covid-related court filings found&nbsp;<a href=\"https:\/\/lexmachina.com\/blog\/continuing-to-track-new-litigation-caused-by-covid-19\/\" target=\"_blank\" rel=\"noreferrer noopener\">more than 1,500 cases<\/a>&nbsp;in just four months, from March 1 to July 4, 2020. By May 2021, that number had increased to&nbsp;<a href=\"https:\/\/lexmachina.com\/blog\/2020-impact-of-coronavirus-pandemic-on-litigation-activity\/\" target=\"_blank\" rel=\"noreferrer noopener\">6,900 Covid-related cases<\/a>, with pandemic-related filings likely to continue for months, or even years. For some companies, audits and investigations prompted by pandemic-related suits may uncover other areas for potential scrutiny\u2014for example, if a company is not following a proper procedure.<\/p>\n\n\n\n<p>Surety companies should anticipate a rise in appeal bond demand for years to come, both from pandemic-related filings and cases brought to light by Covid-era investigations.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-3-accelerated-interest-in-cryptocurrency\">3. Accelerated interest in cryptocurrency<\/h3>\n\n\n\n<p><a href=\"https:\/\/business.libertymutual.com\/insights\/retail-banking-bonds-and-bitcoin-3-financial-institution-trends-to-watch-in-2021\/\" target=\"_blank\" rel=\"noreferrer noopener\">Click here for the rest of the story&#8230;<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Liberty Mutual | financial institution | Business Insurance | \u201cThe banking industry can uniquely act as a primary source of stability,\u201d McKinsey journalists wrote in&nbsp;an article&nbsp;on U.S. banking and the pandemic in May 2020. Despite the fluctuating economy, financial institutions rose to meet the challenges posed by the pandemic. They stayed strong for the last [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":14672,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16,1,2],"tags":[1167,1170,1163,1161,1164,1166,1169,1162],"class_list":["post-9288","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-blog","category-insurance","category-shield-blog","tag-bonds-and-bitcoin","tag-court-bonds","tag-financial-institution-definition","tag-financial-institutions","tag-name-of-financial-institution","tag-retail-baking","tag-surety-trends","tag-what-is-financial-institution"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.shieldagency.com\/blog\/wp-json\/wp\/v2\/posts\/9288","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.shieldagency.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.shieldagency.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.shieldagency.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.shieldagency.com\/blog\/wp-json\/wp\/v2\/comments?post=9288"}],"version-history":[{"count":3,"href":"https:\/\/www.shieldagency.com\/blog\/wp-json\/wp\/v2\/posts\/9288\/revisions"}],"predecessor-version":[{"id":14673,"href":"https:\/\/www.shieldagency.com\/blog\/wp-json\/wp\/v2\/posts\/9288\/revisions\/14673"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.shieldagency.com\/blog\/wp-json\/wp\/v2\/media\/14672"}],"wp:attachment":[{"href":"https:\/\/www.shieldagency.com\/blog\/wp-json\/wp\/v2\/media?parent=9288"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.shieldagency.com\/blog\/wp-json\/wp\/v2\/categories?post=9288"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.shieldagency.com\/blog\/wp-json\/wp\/v2\/tags?post=9288"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}