The choices consumers have today for deposit relationships are broader than ever before. Internet banking options changed the game for everyone.
Ron Shevlin from Cornerstone Advisors warns, “The older Millennials predominantly went to Megabanks when they opened checking accounts. But the younger Millennials, and to a good extent Gen Zers aren’t going to megabanks. They are opening up digital accounts with digital banks, fintechs and others. Some are opening up second and third accounts with newer players.”
Today’s consumers demand real value, tech-friendly services, great pricing (rates), and easy account opening. The brand with the most relevance to the consumer wins out.
Winning the deposit game comes down to several core strategies.
While there are many paths to accomplishment, make sure that you explore the following as you prepare for this year. Now is the time to go on the offensive!
Most of the pressure you will face is the “brand experience.” How does your brand meet the demands of today’s consumers? How much digital adoption have you allowed? How easy is it to open an account electronically? For instance, SoFi has an amazing experience, and they nurture the consumer with many other tools and insights. Prices and fees are not the only reason people select an account. Work hard to fix the deficient areas of your brand experience.
When looking at your deposit options, note the three unique categories and approaches to grow your base:
• Transaction Accounts – By far, the bread and butter includes checking and savings. Driving new business in this category should focus on key attributes important to your target customer. Many can be leveraged today, including High Rate Checking/Savings, Low/No Fee ATMs, faster access to cash and deposits, and other niche services.
Promoting these accounts can include a broad form of traditional media, targeted email, and direct mail. Some companies are even bringing back gift incentives for opening new accounts. Don’t be afraid to lead with a high-interest checking account.
• CD/Money Market Accounts – This is a price game right now with a 5% minimum APY to be credible in the market. With the Fed halting rate increases and the likelihood of rate stabilization coming in 2024, you’ll want to feature shorter-term CDs with higher initial rates so you can adjust going forward. These products need to be pushed into the market by all traditional media means.
• Retirement Accounts – Don’t forget the demand for traditional and Roth IRAs. These are products that people are shopping for, so don’t be afraid to use more traditional tools such as: Branch merchandising, Outside banners, posters and window signs, Digital and Traditional advertising.
Development and Retention
Cross-selling new accounts is crucial to keeping current clients and creating “sticky” relationships. In a recent case study from Onoative, one of its credit union customers encouraged indirect auto loan holders to open a checking account with an offer that leveraged the original relationship (the indirect loan) and a direct mail letter that included a QR code. The campaign had a target audience of 2,782, and the credit union gained 116 new checking account relationships – an impressive conversion rate of 4.2%.
For more great ideas for growing deposits, download Westamerica’s Deposit Success Brochure here: Deposit_Success.pdf