Michael Affuso, President & CEO, New Jersey Bankers Association

In a conversation with Invest:, New Jersey Bankers Association President and CEO Michael Affuso described how the Association prioritizes educating customers on both financial literacy and online safety in order to build both wealth and security, although a human touch will always be required. “Technology cannot make final decisions for complex questions, so there needs to be an integration between people and technology,” he said.

In the past 12 months, what have been some of the most notable achievements or milestones for the New Jersey Bankers Association?

We have been making incremental changes over the last few years, and 2024 saw strategic planning for the future. The Bankers Association will be leaning into advocacy, as before, but with new efforts underway. As part of that expanded role, you will see us out in the community more, especially in regard to the Community Food Bank of New Jersey, which we have made a five-year commitment to provide 1 million meals to families in New Jersey. We have also supported events surrounding the commissioning of the U.S.S. New Jersey submarine. The Association tries to provide educational opportunities for our veterans, as well as provide food support for the neediest of New Jerseyans. We do this to support and represent our industry.

Along with New Jersey bankers, our members supported the efforts surrounding the U.S.S. New Jersey, but I am most proud of our work with the food bank. On the business advocacy side, we work closely with local chambers of commerce to ensure their members have access to banking services and advocacy.

There has been an influx of new residents and businesses relocating to the New Jersey region. What impact does that have on the banking sector for the region? 

We are quite active in the film industry, and New Jersey is poised to become the Hollywood of the East Coast. There is a military facility in Monmouth County that is going to become a major facility for motion pictures. There are both large and small businesses moving here. Small businesses are the backbone of the country, and we fund that backbone. Most of our banks are closely involved with lending to small businesses. As we see small companies move in, we have 62 banks that serve all different niches, and we are here to serve the local business population.

How have ongoing changes in the market impacted the New Jersey Bankers Association and the broader banking industry in the state?

The New Jersey economy is quite diverse. We have banks in southwest New Jersey that lend to agriculture, we have banks in Cape May that lend to tourism or fishing, and we have banks in northern New Jersey that service a variety of industries as well as homebuyers. Right now, the economy is doing well, and the banks in our state are strong. That strength is a reflection of the economy, as well as the fact that New Jersey is a wealthy state. There are still concerns, especially with Wall Street firms moving from the East Coast to Texas. We are always concerned about the exodus of high wages and high earners, because those are the people who pay a whole lot of money in taxes in New Jersey. The folks who remain here will fall under additional pressure. We aren’t immediately losing sleep over this issue, but we are actively engaged in analyzing this development.

We are also observing changes in social trends. More workers are returning to the office with remote and hybrid work being phased out, and it appears that COVID is a thing of the past. Previous concerns about office space have shifted, and we are monitoring this closely as well.

Given the rising population and, as a result, the rising demand for housing, how does the Association view home loans and construction lending?

The residential lending market is interesting. Because of the rising interest rates and lack of supply, the market is a bit slow. We have a court case called the Mount Laurel case, which imposes upon each municipality the duty to create a certain amount of affordable housing. That affordable housing is either rehabilitated or new construction. This year, we are entering a round of agreements where each municipality will come to an agreement with the state to determine allocations. As those agreements are effectualized, I believe new opportunities will arise for additional lending. Death and divorce are the main reasons why anyone would move during this time and give up low-rate mortgages.

Why is financial literacy important not only to your industry members, but to the community as well?

Our members are always trying to focus their customers on financial literacy. This makes them better customers and prevents customers from being duped by bad actors. Technology is good and bad, and it’s easy to click on a virus, which can devastate businesses. We try to train customers on the ways in which banks will or will not contact them in order to prevent viruses. For smaller businesses, staying current with cybersecurity can be difficult.

With the rapid advancement of financial technology, how is the New Jersey Bankers Association supporting its members in integrating digital solutions?

Technology is evolving extremely quickly. New types of payment systems, like Zelle, are the future of banking. They allow people to make payments in real time and hold onto their money as long as they need to. We will see a continuing proliferation of these types of technologies, as well as technology deployed for lending. Complex transactions require human analysis. Technology cannot make final decisions for complex questions, so there needs to be an integration between people and technology. Fintech is helpful for easy situations, but for difficult cases, you need effective customer service and a live person on the phone, so there will always be a role available for people to fill.

What is your outlook for the New Jersey banking sector overall for the next two to three years?

In the years to come, it will be important to pay attention to tariffs and the effects of them on economic activity. We don’t know yet where they will land and on what industries. New Jersey’s port facilities are some of the largest on the East Coast, and if there are policies that negatively affect trade, that will negatively affect the port. Tax and spending policy changes of the federal government could affect us as well. In New Jersey, we are keeping an eye on how the state and local tax deductions will change. We see a slowing of federal regulation, which will likely lead to additional mergers and acquisitions. When banks merge, the banks are able to provide better services because of the efficiencies found in the merger. We are also observing new market entrees, with at least three main industries entering the market at this time.