The information in this article is intended for general informational purposes only and does not constitute legal advice. If you have questions related to the topic “is a recession coming?“, we recommend consulting your own legal or financial advisors. The opinions expressed in this article are the opinions of the individual authors and may not reflect the opinions of MeridianLink, Inc.
Economic headwinds are continuing to make headlines. Leading global investment firms and brokerage researchers are all raising their recession forecasts, with J.P. Morgan now predicting a 60% chance of the global economy entering a recession by year’s end, up from 40%. This signals a clear need for your financial institution to take proactive steps to safeguard its financial health and actively lead as a stabilizing force for the customers and members who rely on you.
In our over 25 years of business, MeridianLink® has been a beacon of support through multiple economic cycles, including financial crashes and downturns. We’ve seen firsthand how critical it is for institutions to stay agile, and data driven. Most recently, the resilience demonstrated by banks and credit unions during the COVID-19 pandemic showed just how adaptable financial institutions can be when equipped with the right technology, strategy, and support.
So, is a recession coming? And more importantly, what can you do right now to be ready?
Whether a full recession is imminent or we’re simply navigating a period of uncertainty, the call to action for community financial institutions is the same. In this blog, we’ll walk through what to expect when you’re expecting a recession, and one definitive action you can take to prepare your operation.
Understanding the impact of a recession on lending operations
Even the strongest financial institutions aren’t immune to the pressures a recession brings to banking operations. Deposits may begin to runoff, delinquency rates tend to rise, loan losses can escalate, borrowing slows, and risk appetite narrows. Meanwhile, consumers are looking to you for financial stability and guidance during uncertain times.
The KBW Regional Banking Index has already dipped, signaling a potential downturn. But a recession doesn’t have to also signal a retreat for your institution. In fact, with the right tools and partners by your side, it can become an opportunity to not only weather the storm but also strengthen your connection with the community and build deeper trust with your members or customers.
Getting ready to navigate what’s next
When every decision counts, having access to timely, actionable data is essential for staying ahead. Your financial institution must be equipped with the tools and insights necessary to quickly understand and respond to changing conditions—whether that means identifying early signs of stress in loan performance, tracking shifts in consumer behavior, or spotting high-performing segments that could present new opportunities.
That’s where the right technology—and the right partner—make all the difference. With solutions built to evolve alongside shifting economic realities and a partner who understands your goals, you can:
- Adapt quickly to evolving borrower needs, adjusting terms and solutions to offer support where it’s most needed.
- Make data-driven lending decisions grounded in current performance, not outdated models that could put your institution at risk.
- Deliver real value to consumers by providing personalized solutions and guidance to help them navigate financial challenges.
- Monitor real-time lending trends and key performance indicators to stay on top of shifts in the market.
- Identify portfolio risks and opportunity segments to guide targeted strategies for growth.
- Improve operational efficiency with better data visibility and streamlined processes.
- Refine decisioning logic using consulting-led analytics to ensure decisions are grounded in the most accurate insights available.
- Build resilience into credit strategies, with expert guidance to help weather economic challenges.
At MeridianLink, we equip you with the tools to access your data—and the partnership to turn it into strategic advantage.
At the heart of this is MeridianLink® Insight, our powerful, data-driven business solution that gives your institution the visibility and control it needs to make quick, informed decisions. Insight goes beyond simply providing raw data—it optimizes how that data is accessed, presented, and analyzed. Real-time loan tracking, trend analysis, and interactive dashboards help you spot market shifts, borrower behavior changes, and emerging risks. There’s no programming skills needed—just impactful insights that drives smarter results.
And when you pair it with our expert consulting services, the depth of data you gain is even greater. Our team works directly with you to refine credit strategies, enhance decision-making, and deliver custom analytics through quarterly reviews. This empowers you to act on current and accurate information, so you’re not reacting to change, you’re ready for it.
Resilience through experience
Founded in 1998, MeridianLink has weathered it all. The dot-com bubble burst, the 2008 financial crisis, the 2010s fintech boom, and the challenges of the COVID-19 pandemic. This history of evolution and stability sets us apart, especially when newer fintechs weren’t around for these critical turning points.
So, as a recession looms, remember:
- Adopting a strong data strategy is just one decisive action you can take on your digital transformation journey.
- And, whether we’re heading into a recession, facing financial uncertainty, or simply navigating the shifting trends and needs of today’s consumers, taking proactive steps now is the key to ensuring your institution remains resilient and ready for whatever comes next.
