Don’t Wait ‘Till the Cows Come Home: Establish Your Deposit Strategy Today
Don’t wait for the day your deposit dollars walk out the door to figure out how to stop them from leaving or how to get them back. Otherwise, you will lose valuable momentum in the wake of heightened deposit competition.
Early in 2017 we compiled our predictions for the upcoming year. These were a mix of economic and industry predictions. How accurate were these predictions? As it turns out, we were mostly on the mark in our predictions, at least in terms of direction if not always in magnitude. Here is a review of our 2017 predictions and an assessment of the accuracy of each.
Declining overdraft income makes lower income households challenging to serve profitably. Andrew Vahrenkamp, Senior Research Analyst at Raddon, gives some ideas on how to serve these consumers effectively and efficiently.
In December, Raddon held its quarterly seminars for participants in the Performance Analytics program. This program provides financial institutions with comprehensive analytics and peer benchmarks that measure performance across all areas of the organization and helps guide strategic initiatives. The workshops facilitate a review of the latest research findings and offer a platform for discussing how financial institutions can respond to the challenges they face today.
Recent changes to the US tax code will affect homeowners with mortgage and home equity products in a number of ways. In this Raddon Report, we look at what has changed, who will be affected, the impact of the change on homeowners, and what institutions can do to market their mortgage and equity products in this new environment.
2017 proved to be a good year for the U.S. from an economic perspective and for the financial industry as well, with new record highs achieved in the stock market, much stronger GDP growth - especially in the second and third quarters, and continued improvement in real estate sales and values. The industry showed continued improvement in earnings and also continued strong loan growth.
Every marketing textbook will tell you how important a strong brand is for generating market share, but measuring that brand can be a tricky proposition. A financial institution has long been able to understand its levels of awareness and favorability in its local market, but was a particular level good? Bad? Indifferent? Relative to their peers, how strong should their brand be?
Anticipated loan demand is finally increasing after steadily falling since the financial crisis of 2007/2008. Raddon’s 2017 national research indicates 28% of consumers anticipate opening a loan in the next 12 months. This demand for loans has increased significantly from a low of 19% in 2015 and just 21% last year. Home equities are among the products showing increasing demand. The increase in demand is being fueled by rising home prices (up by one-third since 2009) and lower inventories of houses on the market.
For the last decade, marketers have been obsessed with trying to reach the elusive millennial consumer. The quest is not unwarranted, as the Millennial generation continues to make its presence felt on the financial services sector with each passing year. But with the leading edge of Millennials now in their late thirties, this group is no longer the new kid on the block.
Raddon held its first-ever national research conference in Chicago November 6-8. The three day event was attended by over 250 C-level and marketing professionals from banks and credit unions across the United States, and the content featured Raddon’s own proprietary national consumer and small business research as well as several very informative keynote speakers and panelists.
Earlier this year, the Fed implemented two rate increases and appears poised for another increase at the end of this year. With rising rates and improved loan to deposit ratios that have more institutions looking for funds, it’s fair to say that deposits are squarely back on the radar. At Raddon, we’ve been talking with our clients about the implications of the changing environment and how to prepare for the coming challenges. The first and most obvious takeaway is that:
At Raddon, we often state that age and income are the best predictors for how a household will consume financial services. Where someone is in their life determines whether they are a young borrower or an older saver, better than their generation does. After all, Baby Boomers might be depositors looking for retirement now, but forty years ago, they were the ne’er-do-well young borrowers discoing on Saturday Night Fever.
Raddon conducts a group research study three times a year for approximately 160 financial service organizations that range in assets from $250M to $5B. At the beginning of each year, the survey is updated to include our standard key metrics as well as new and trending topics. The first wave of nearly 30,000 responses has been processed and some interesting findings have emerged.
The banking industry has seen its share of challenges over the past decade. Those challenges continue to be significant; especially as it relates to generating revenue. One area in particular is in growing non-interest income, thanks to challenges from the regulatory environment, changing consumer behaviors, and technology. As an industry, we need to optimize our overdraft and interchange income, as well as find new non-interest income opportunities. One opportunity lies within wealth management, or Investment Services.
Many financial institutions are starting to think about future growth in their strategic planning. As they consider growth opportunities, five big questions have come to the fore. We’ll look at each in turn, but to get all the insights, you’ll have to come to our inaugural Raddon Research Conference this November!
The ubiquity of Internet-capable mobile devices and the evolution of this technology in the banking realm present new challenges and opportunities for financial institutions. As financial institutions continue to make significant investment in mobile banking technology, the industry’s primary imperatives are twofold: Growth and retention.