SAN DIEGO-Another 2,500 financial institutions will voluntarily merge over the next five to 10 years, according to one analyst.

And that "right-sizing" is only going to mean more flux with which to deal, according to Raj Shivdasani, president and CEO of Harland Financial Solutions.

"On the external side, the economic recovery continues, but it is slow and shaky," said Shivdasani, who spoke with Credit Union Journal during the company's Connections Conference here. "[Federal Reserve Chairman Ben] Bernanke talks about a need for the Fed to create escape velocity-taking measures to create self-propelling momentum in years to come. I believe the recovery that started in 2010 will continue, unemployment will start to fall in 2013, and interest rates will remain low possibly for two more years."

However, Shivdasani warned, if at the turn of the year the mandatory spending cuts go into effect and the Bush tax cuts are allowed to expire, the result will be a "huge jolt" on the U.S. economy and will bring up danger of recession.

There has been a slowdown of mandated financial institution closures, but Shivdasani said the pressure on FIs continues: "There are regs, regs and more regs, fee income, loan demand, capital requirements, risk management..."

Many people talk about the "new normal," Shivdasani continued, noting the term generally applies to businesses having to "stay ahead of the curve."

"Everyone is looking for efficiency via integration and automated workflows," he said.

One change that will drive greater integration of banking solutions, said Shivdasani, will be the Oct. 25 release of Windows 8. "Harland will be looking at cloud capabilities," he said.


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