“How to Get More Deposits at Lower Costs? Give Marketing Room to Run”
With deposit competition set to increase, banks can limit funding costs by distinguishing among customers unlikely to move their money, those open to moving it, and rate shoppers, argues Neil Stanley, founder and CEO of The CorePoint. He recommends giving marketing more flexibility to attract deposits through product pairings and other nonpricing features while reserving rate negotiations for customers motivated primarily by price.
“Probative Inquiry Into the 2023 Financial Sector Stress Events”
The Starling report on the 2023 banking turmoil, commissioned by Fed Vice Chair Michelle Bowman, says Fed supervisors had clear warning SVB was at risk but did not act quickly enough. For example, the Fed’s own surveillance team identified SVB as high-risk in June 2022, but supervisors did not require the bank to reduce its interest-rate exposure or rely less on uninsured deposits. The report also found no evidence that social-media posts caused or significantly accelerated the bank run.
“Crypto Blew Its Big Moment—and the Blame Game Has Begun”
Coinbase CEO Brian Armstrong played a central role in negotiations over the Clarity Act, using the industry’s political influence to oppose limits on stablecoin rewards. His hardline approach delayed compromises and frustrated lawmakers in both parties, contributing to the bill’s collapse, the WSJ says. The industry is now weighing whether to punish Senate Democrats at the ballot box or preserve the bipartisan support it needs to revive its agenda.
“How Community Institutions Can Turn Data into a Competitive Advantage”
Digital channels have made it harder for community banks to sustain their traditional advantage of deep local knowledge and strong customer relationships through face-to-face interactions alone. But insights once gained in person are increasingly visible in banks’ data. This article offers a roadmap for consolidating that data and using it to tailor customer experiences.
“Meta’s Muse Comes for Financial Stocks”
Rapid adoption of Meta’s new AI agent, which has partnerships with PayPal and Plaid, has contributed to a selloff in financial stocks amid concerns that it will disrupt consumer payments, insurance, financial planning, and other areas of financial services.
“Why More Credit Union and Bank Mergers Are on the Horizon”
Despite a recent slowdown in announced CU acquisitions of banks, a healthy pipeline of potential sellers points to more deals ahead, analysts say. Community banks facing margin and succession pressures may find CUs attractive buyers, while CUs see acquisitions as a way to expand geographically, add deposits, and gain commercial-lending capabilities.
“Private-Credit Firms Are Buzzing About Getting in on JPMorgan’s Card Empire”
JPMorgan Chase is reportedly exploring whether private credit firms could underwrite so-called second-look applications for co-branded credit cards the megabank rejects. A deal, should one come together, could ease a longstanding tension between merchants and banks over application approvals while giving private credit a stronger foothold in mainstream finance.
In Other News
Long-term Treasury yields hit their highest level in more than two decades, an OpenAI agent hacked a government website, and Google is sending the AI data center race into orbit.