Area banking customers will be looking at slightly higher interest rates that will impact both saving and lending in 2017, according to an official at Farmington Bank.
“Rates are still historically low but it will be slightly more expensive to borrow,” said Kenneth Burns, executive vice president of retail and marketing for Farmington Bank. “Even though the Federal Reserve is expected to raise rates a few more times this year, mortgage and loan rates will continue to be very attractive.”
Farmington Bank has 24 branches in Connecticut and Western Massachusetts with 2.9 billion in assets. They have a 14 percent market share where they have a branch, Burns said. “One in five people in New Britain bank with us,” Burns added.
While it will cost slightly more to borrow in 2017, savings interest rates will grow at a slower rate, Burns said.
Customers are likely to enjoy more “robust” online and mobile banking platforms in the coming year as new technology drives services such as allowing customers to sync their phones with their credit cards, Burns said. “You’ll be able to direct an ATM with your phone,” he said.
Customers will also be able to pay bills using their cell phones. “I think as the payment systems get more and more efficient, there will be person to person payment using mobile apps rather than credit cards, he said.
One of the big questions in 2017 will be how the banking industry will react to mobile payments, he said.
In the financial planning industry, the Connecticut Better Business Bureau is recommending that people pay down credit card debt as soon as possible to improve their financial outlook and credit score. Items such as missing payments or not making payments on time not only cost consumers money in fees and extra interest but also can impact their credit score. Lenders use credit scores to determine who they will allow to borrow money, how much money consumers can borrow and at what interest rate. Consumers should regularly obtain their credit report to check for errors, the Connecticut BBC recommends.
The other advice that the Connecticut BBC is offering is that people pay down their highest balances first and don’t “max out” cards to the credit limit. “Your credit history and score follow you throughout your life and can have far-reaching consequences,” said Connecticut BBC spokesman Howard Schwartz. “It is essential that consumers know what is in their credit files, to prevent having a credit application is rejected.”
Another area that is expected to impact banking and financial transactions is cyber security, Burns said. “We are putting together policies on cyber security and working with local police departments, the FBI and the banking industry will have to put more and more resources toward this.”
Lisa Backus can be reached at 860-801-5066 or Lbackus@newbritainherald.com.