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Digital Banking

Upgrade the Front Line to Attract and Retain Deposits

Beth Ericson
Aug 1, 2023

When was the last time you were in a bank or credit union branch?

When I was given power of attorney for my mom’s bank accounts, I needed to go to a branch and work with someone to put her money to work. Seniors are in a unique stage of life where they must convert their savings into a sufficient revenue stream to assist with the cost of senior living facilities. The current rate on my mom’s money market was only 0.15%. The best way to attack this challenge was to go to the branches of a couple of local financial institutions and learn about my mom’s best financial options.  

At the first institution, a frontline employee greeted me as I walked in and asked how they could help. After I explained what I needed, the employee informed me that I had to wait for the financial advisor. In the end, the advisor didn’t have time to meet with me and I had to schedule an appointment online. Throughout that entire encounter, the frontline staff never even attempted to gain an understanding of the size of the wallet I was there to discuss. At the second institution, the frontline employee gave me rate sheets and the financial planner’s business card so I could schedule an appointment.

Wait, aren’t deposits a hot commodity?  

Deposits, deposit strategies, and strengthening deposit relationships are front and center, with total deposits contracting, accountholders chasing rates, and money movement becoming easier. Now is the time to reconsider your deposit strategies to mitigate deposit churn, keep cost of funds in check, and protect net interest margin (NIM) when acquiring and retaining deposits.

 Take the Front Line to the Next Level

Relationships take work. Retaining existing accountholders is as important as gaining new business. No matter how long an accountholder has been with an institution, they want to feel as though they matter. Your frontline employees haven’t experienced the deposit-gathering challenge for 15 years. “Frontline employees think they are offering a commodity and believe checking, savings, CD accounts are just like everyone else,” says Neil Stanley, founder and chief executive of The CorePoint, a consulting firm in Omaha, Nebraska. “You can try to outcharm and outhustle everyone else, but charm and hustle only take you so far. The reality is if your team isn’t seen as financial experts that know how to manage money, you are in trouble. Now is the time to upgrade your front line. If your front line is sitting around with a rate sheet, you’re in trouble.”

A first impression sets the tone for the entire relationship. Consumers are going to act in their own best interest and take their money where they are receiving higher returns, guidance, advice, and support for every life stage. Your institution needs financial experts who know how to manage money and understand the goals of the consumer. A successful commercial lender doesn’t use a rate sheet. The lender is empowered through training and coaching, and the frontline employees need to be empowered in the same way.  

 Grow the Deposit Relationship

Understand your consumer segments to support their entire financial lives rather than just confining yourselves to the old, usual tools like the consumer rate sheet. Use new and creative ways to make the deposit relationships stickier for all consumer segments. Not all consumers are about higher rates. For instance, financial institutions can acquire and attract a Gen Z consumer through a digital, frictionless account opening process in which the consumer can set up direct deposit and doesn’t need a minimum deposit to open the account. This same consumer will turn to the financial institution for an auto loan or mortgage loan in the future. Build the relationship so that the institution they turn to is yours.

Even though CDs are less popular these days, they can be revitalized to meet consumers at different financial life stages. Use technology to tailor the CD terms to meet the consumer’s needs, such as maturing for a life event like paying for a child’s college tuition. Possibly use CD ladders as a revenue stream for seniors in which the consumer invests in multiple CDs with varying maturities. This provides the consumer with a low-risk investment with short- and long-term maturities offering both liquidity and higher rates of return over a longer period.

You may be wondering about my mother’s situation. After checking around and understanding the complexities of her finances, our needs were best met by working with a financial planner who did advise me to set up one account as a CD ladder.

My visits to those institutions were a reminder of the opportunities for banks and credit unions: providing personalized guidance and support to accountholders and helping accountholders make informed decisions is the foundation of building an ongoing financial relationship.

Simply put, grow the relationship based on the needs of the acountholder.

[1] Credit Union Financial Performance Indicators, 2022 Q4, Filene Research Institution.

[2] U.S. Bank Deposits Dropped by Most in 39 Years to Start 2023, Yahoo Finance, May 2023.


[4] Analysis of FDIC Data by The CorePoint.

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