Thanks Rob,
In addition to the ideas shared in the article, many bankers are finding success in attracting more properly priced deposits using:
- High yield savings offers that prohibit cannibalizing existing deposits after account opening. These accounts are not available to single service depositors since they require the depositor to open a new CD as they open and fund the high yield savings that competes with the best offers of direct banks. They are typically referred to as Companion Savings.
- Refinancing competitor term deposits ahead of maturity. With today's interest rates and the negligible penalties on CDs opened last year and before, depositors can be invited to trade out of old CD accounts at the competitor and upgrade to have a CD mature on the same date as their current account and net much greater values. Getting depositors out of what they consider a bad deal at the competition and into a good deal immediately that they didn't know was possible is a great way to establish a great relationship.
- A time and define process to offer CD promotions. Bankers are once again realizing that the approach of constantly having a CD promotion is a trap that leads depositors to be Rate Shoppers and frontline to use Specials as their only offering. The best bank executives wean their bankers off the continuous CD specials with customized solutions delivered by the frontline.
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Neil Stanley
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Original Message:
Sent: 06-28-2023 17:33
From: Rob Blackwell
Subject: Banks Kick Deposit Strategies Into High Gear, Anticipate Higher Stress Capital Buffers
With deposit competition running hot, more banks are offering high-yield products to attract and retain customers, according to a new report by S&P Global Market Intelligence. Some are offering high-yield savings accounts at rates higher than 4.5%. To mitigate the risks of compressing margins and cannibalizing existing offerings, banks are marketing high-yield savings accounts and CDs to new customers only. They're also cross-selling checking accounts, treasury-management services, and other lower-yielding offerings to customers with high-yield accounts.
Another S&P post discusses how banks are preparing for higher stress capital buffers based upon the results of this year's stress test, which analysts say is unusually harsh. The results of the stress tests will be released Wednesday afternoon.
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Rob Blackwell
Chief Content Officer and Head of External Affairs
IntraFi
Arlington, VA
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