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Digital Banking

Gone Fishing (For Deposits)

Erin Davis
Jul 13, 2023

Summer is my absolute favorite time of the year. Growing up in south Florida, I spent many weekends fishing on my grandad’s boat, the Jack Pot. We’d go miles out into the Gulf of Mexico, searching for grouper. I learned quickly that fishing isn’t as easy as it looks – which is why it’s referred to as “fishing” and not “catching.” It requires a lot of patience, and like most things in life, you get better at it with practice and time.

As deposits reach their lowest levels since 2009 – when many younger bankers were still in college ‒ the mission to attract and grow deposits is a fairly new concept. Deposits are critical for an array of reasons. They translate into lucrative lending opportunities as well as fee-based commercial solutions, like payments and financial management services. Growing deposits is now the top priority for banks and credit unions over the next two years, and with summer in full swing, it’s a good time for some (fishing-related) tips and tricks to help you reel in more deposits to support your financial institution’s overall growth strategy. 

Pick a Good Spot

“Most of the world is covered by water. A fisherman’s job is simple: pick out the best parts.” – Charles Waterman

Your deposit strategy should rely on “fishing where the fish are,” so get to know which ponds will yield the biggest catch. Gather data and analytics on your existing deposit holders to determine their demographics, preferences, and profitability. Design profiles of who is already attracted to your institution, and for what reasons. Determine if those depositors are hypersensitive to interest rates. This type of analysis will not only help you adjust your marketing efforts but will also help you recognize which deposit offerings to vigorously promote. 
Develop strategies based on niches in your local area. Use the data you have to target certain demographics, spending patterns, etc., and tailor products along those lines. 

Expand your digital account opening program to businesses. The top 25 U.S. banks now account for 84% of primary banking relationships with SMBs, but you know your local communities better than they do. Community financial institutions bring powerful intangibles to the table that larger providers often can’t match ‒ like personalized service, community expertise, industry specialization, and tailored product design. Success for smaller financial institutions hinges on translating those advantages to the digital space as businesses demand more from their financial institutions’ online and mobile tools.

Get the Gear: Rod, Reel, Lures, and Bait

“If people concentrated on the really important things in life, there’d be a shortage of fishing poles.” – Doug Larson

Offer the best promotions with the most added value to the best depositors. The idea is to create favorable pricing for people who bring multiple financial relationships to one banking provider.

Get creative with older tools like CDs and savings accounts. For example, offer midterm CD refinancing or create hybrid bundles that better balance your financial institution’s liquidity and low cost of funds with the accountholder’s desire for a marginally better rate.

Even before SVB’s failure, banks and credit unions looking to shore up deposit gaps among Gen Y and Gen Z were offering early paycheck access and mobile-only account openings that don’t force account funding up front – both staples among neobanks like Chime. Gen Z mobile bank users will reach 42.9 million in 2025, overtaking Gen X.  

Cast a Wide Net

Surfing the net is great, unless, of course, you’re a fish. – Anonymous 

One of the best strategies for banks and credit unions to effectively navigate today’s choppy economic waters is to grow the total number of deposit accounts to offset the overall lower savings rate and maintain the ability to both originate loans and cover any default losses as more accountholders face financial struggles. When it comes to deposit accounts, there really is strength in numbers. A good way to quickly ramp up deposits is to offer fast, safe, and frictionless digital account opening.

Forty-eight percent of Gen Zers and millennials have opened an account with a new financial provider after a frustrating digital banking experience. Convenience has always driven deposit acquisition, but today’s definition of convenience doesn’t necessarily mean having a branch in the potential depositor’s neighborhood. Convenience is increasingly defined by the ease of online account opening and online transactional ability — no matter where the accountholder lives or what device they’re using.

It’s hard to believe that social media wasn’t a primary factor the last time banks and credit unions were fishing for deposits. Depositors are fully aware that they have alternatives; find ways to remind them that you are a viable option with online advertising and SEO tools. Two out of 10 users between the ages of 18 and 24 start with searches on either TikTok or Instagram. Are you fishing where these younger depositors are spending their time? 

Providing education, guidance, and options are at the heart of the relationship banking that people need today. The institutions that make account opening easy and help people address their financial needs to make their dreams a reality have the best chance of remaining or becoming, the financial home of depositors.

After all …
“Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime.” – Anonymous 

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