【what is tsrp instead of msrp】Banks and tech will finally get married in the 2020s: Wells Fargo's Mike Mayo

Bank stocks are capping off their best year since 2009. Veteran bank analyst Mike Mayo thinks the next decade will be ever better thanks to the coming banking fully embracing technology.

“I think this what is tsrp instead of msrpwill be the golden age of banks and technology,” said Mayo, who heads U.S. Large-Cap Bank Research at Wells Fargo Securities. “We see banks finally getting married to technology. If you look back over the decade they’ve dated, they’ve broken up, they went their own ways with risky behavior, they reconciled. And now we think they’re engaged to have a more permanent relationship.”

Mayo writes in his latest note that banks don’t have much of a choice, because of the money they’ve pumped into tech: “Banks spend more on tech than any other industry (~$150 billion per year) and, therefore, better get their money’s worth.”

That spending has been ongoing without the payoff of banks seeing full digital integration and engagement. Mayo says that’s poised to change, in part because of management shifts.

“You now have the chief technology officer in the c-suite for most of the largest banks,” he told Yahoo Finance’s

On the Move

. “The chief technology officer needs to have more power to enforce the technology solutions that cut across so many different business lines.”

Banking and tech are about to get more intimate.

In particular, Bank of America (

BAC

) and JPMorgan (

JPM

) are making progress, but he points out they still have far to go. BofA

said

in early December that its mobile-banking artificial intelligence tool, “Erica,” had reached 10 million users. That compares with 29 million active mobile users, 38 million active digital banking users, and 66 million consumer and small business clients overall.

More tech integration at the banks will be good news for everyone in the ecosystem, Mayo maintains. “We see this as a win-win-win decade ahead: a win for the customers, who have better service; a win for the regulators and society because banks are a lot less risky, and a win for the shareholders.”

The KBW Bank Index has risen 32% in 2019, outpacing broader market gains for its best performance since 2009. Citigroup (up 53%), Bank of America and JPMorgan Chase (both up 42%) have led gains.

Mayo doesn’t see the next year as risk-free. He highlights pricing competition from discount brokerages, rising interest rates and politics.

Julie Hyman is the co-anchor of

On the Move

on Yahoo Finance.

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