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Five Big Strategic Questions

August 25, 2017
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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! 

  1. Millennials have moved from the future to the present, but what can financial institutions do to attract the next generation coming up?  Generation Z, those born after 1999, are an on-demand generation.  They have come of age in a touch-screen world, where all information is available at the touch of a fingertip.  So they are much more open to digital experiences than their elders.  As an example, Upcoming Raddon research finds that 27% of this generation have used their smartphone for mobile payments, compared to 13% of everyone else.  At our upcoming Raddon Research Conference, we will hold a breakout session digging deeper into this unique new generation: how they bank, how they save, how they perceive the world, and how those perceptions can help you earn their business.
  2. As interest rates rise, what can financial institutions do to retain their rate-sensitive deposits?  Rising rates put pressure on institutions’ funding costs, as rate-sensitive consumers seek the opportunity to increase the earning potential of their savings.  Recent Raddon research found that 24% of Americans hold 89% of deposit balances, and that those high-balance depositors are far more likely to have moved their deposits to a different institution in search of a better rate.  At our upcoming Raddon Research Conference, we will host a breakout session exploring how financial institutions can update their deposit strategy playbook to use new products, features, promotions, and marketing to retain at-risk dollars while keeping their overall cost of funds as low as possible.
  3. Overdraft fees no longer grow at the rate they used to; how can financial institutions profitably serve consumers previously subsidized by overdraft fees?  Between regulatory requirements and changes in consumer behavior, annual overdraft fee income for the industry is more than $7 billion less than it was in 2008.  Financial institutions seek to serve the lower half of the market, yet without the fee income that made low balance checking accounts profitable, they will need to rely on either capturing a greater share of wallet to maximize interest income or on reducing the operating expense needed to maintain these accounts.  At our upcoming Raddon Research Conference, we will host a breakout session exploring the upsides and opportunities of serving the Mass Market profitably, with data-backed tactical recommendations.
  4. As more and more consumers adopt mobile banking technology, and as more and more functionality becomes available on mobile platforms, will financial institutions be able to shutter their branch network? Mobile banking might be the killer app in the future, but in our upcoming study on mobile banking, we have learned that mobile bankers actually care more about branch convenience than those customers without mobile banking.  At our upcoming Raddon Research Conference, we will hold a breakout session diving headfirst into the world of mobile bankers, understanding how they use their devices, how they prefer the bank, what they do on their phones and what they still want to have available in person.
  5. As financial institutions seek out growth opportunities, how can they leverage their strengths to capture additional small business prospects?  Small businesses increasingly use major banks for their deposits and loans, yet community-based institutions have certain advantages that can help them capture these opportunities.  Recent Raddon research discovered that while 68% of small businesses use a major bank for their primary institution, this group tends to exhibit lower levels of loyalty than businesses using a community-based institution. Furthermore, the research suggests that small business would be more willing to utilize smaller institutions if certain objections were overcome.  At our upcoming Raddon Research Conference, we will host a breakout session on how small business optimism can lead to opportunities for financial institutions to use their strengths to meet small business needs.

To find more questions and answers, attend our inaugural Raddon Research Conference, to be held in Chicago this November 6 – 8.