THE DIGITAL RECKONING - Digital Prowess Modernizing Commerial Pricing Fintechs Enter Everyday Banking - Novantas
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SUMMER 2020
THE DIGITAL
RECKONING
Digital Prowess
Modernizing Commerial Pricing
Fintechs Enter Everyday Banking
4 Cover Story
DIGITAL PROWESS WILL GUIDE SUCCESS AS COVID-19 LINGERS
9 | SITTING DOWN WITH NOVANTAS
12 | THE NEW BRANCH BAROMETER: TRAFFIC PATTERNS
14 | CLIPPING THE BRANCH
16 | NEW STRATEGIES TO MODERNIZE COMMERCIAL PRICING
19 | SURGE DEPOSITS: HOW TO MANAGE THE BALANCE SHEET IN A COVID-19 WORLD
22 | THE CD CYCLE: MANAGING RUNOFF WITH CUSTOMER TREATMENTS
26 | CHECKLIST FOR EFFICIENT CONSUMER DEPOSIT GROWTH
28 | DISTRESSED M&A: UNDERPRICED GEM OR EMPTY FRANCHISE?
31 | FROM FINTECH TO FULL SERVICE: HOW FINTECHS CAN ENTER EVERYDAY BANKING
35 | FOR TREASURY MANAGEMENT TEAMS, A CHANCE TO HELP STRESSED CLIENTS
37 | AT THE PODIUM WITH NOVANTAS
2|
A Note from the
CEOs EDITORIAL
elcome to the Summer 2020 issue of the Novantas Review. We hope that Director, Novantas Center for the
you and your loved ones are safe and healthy. Future of Banking
Robin Sidel
+1 212.901.2742
There are no words to appropriately describe the upheaval that we have all experi-
rsidel@novantas.com
enced in the past several months. Even if COVID-19 abates and economic activity
resumes, the damage won’t be easily or quickly repaired. Daily lives will be disrupt-
CONTRIBUTORS
ed, businesses will struggle and the country will be in the throes of a combative Jeff Diorio
presidential election. Pete Gilchrist
Gordon Goetzmann
Banks have met many of the operational challenges by adjusting branch hours, Andrew Hovet
directing customers to digital channels and keeping employees safe. It is impossible Mike Jiwani
to predict what will happen next. One thing is certain: the COVID-19 crisis is accel- Brandon Larson
erating the transition to digital and virtual access to banking. Bryan Moore
Jacob Nygren
This issue of the Novantas Review addresses actions that bank executives can take Michael Rice
Ryan Schulz
in coming months to ensure they have quality deposits, efficient operations and the
Robin Sidel
proper tools for this transition.
Rick Spitler
Bob Warnock
We knew that our banking clients were hungry for real-time data and analysis
during the pandemic, so we took a hiatus from the Novantas Review in the past few DESIGN
months and began publishing weekly insights about deposits and retail banking. We Art Direction and Production
tracked the flow of federal stimulus payments into (and out of) consumer checking Adrienne R. Cohen
accounts, analyzed traffic patterns to help banks identify where to re-open branches
and offered suggestions for re-training staff to ease strain on call centers. We will NOVANTAS, INC.
continue to present this analysis to our clients on a weekly and monthly basis. Novantas is a leading provider of
data, technology and advice to
financial institutions globally.
Finally, we also made some news of our own recently. In a move to help clients accel-
erate their digital-marketing efforts, Novantas acquired the intellectual property
Co-CEOs and Managing Directors
and assets of Amplero, a Seattle-based AI-marketing optimization platform. We are Dave Kaytes
incorporating Amplero’s machine-learning engine into our suite of offerings to help Rick Spitler
banks further transform their digital capabilities. You will learn even more about
these benefits in coming months. Corporate Headquarters
485 Lexington Avenue
We wish you good health. New York, NY 10017
Phone: +1 212.953.4444
Sincerely, Fax: +1 212.972.4602
marketing@novantas.com
www.novantas.com
Dave Kaytes Rick Spitler Address changes and content
Co-CEO Co-CEO questions can be directed to the
contact information above.
To download and share content from
the Novantas Review, visit
www.novantas.com or follow us on
LinkedIn and Twitter.
Offices
Chicago
New York
San Francisco
Sydney
Toronto
3 | SUMMER 2020
Cover Story
DIGITAL will
guide
PROWESS success
as COVID-19 Lingers
BY RICK SPITLER AND GORDON GOETZMANN
T
he COVID-19 pandemic has pushed banks to act swiftly,
a characteristic that is often rare in the industry. From
closing branches to navigating the complexities of the
Paycheck Protection Program, banks have demonstrat-
ed admirable flexibility and focus in the first months of
the ongoing crisis.
At this point, there is the possibility that the industry will
emerge from the pandemic less harmed than after the 2008
recession. Banks are flush with deposits and they have much
more capital to help sustain them.
Still, earnings are under intense pressure and costs will be
cut dramatically. Credit losses will be a big wildcard in coming
months as banks curtail forbearance programs, landlords press
tenants for rent and government benefits expire or change. At
the same time, economies around the world will stay fragile as
the pandemic ebbs and surges.
It is tempting to slash costs as a way to bolster financial
goals. But such strategies have repeatedly proven damaging
to the core franchise. Forward-thinking banks have an oppor-
tunity to preserve and grow the franchise by investing in core
capabilities that cement customer relationships. It’s always
good business to focus on the core franchise. It’s even more
important to do so in a tough economic environment.
Unlike previous economic upheavals, an abundance of
real-time technology and data-driven insights can now help
banks achieve these goals. This will be especially critical
4|
DIGITAL PROWESS WILL GUIDE SUCCESS AS COVID-19 LINGERS
because some customers have likely the Harvard Business Review. In addition unable to meet the changing needs of
changed their banking habits forever. to cutting costs and improving efficiency, their customers.
Novantas believes the banks that use these successful companies “develop
these capabilities to identify, attract and new business opportunities by making DEPOSITS SURGE
retain the best customers will be in the significantly greater investments than At first blush, it may appear that banks
strongest position to weather potential their rivals do in R&D and marketing,” the don’t need to worry about deposits. The
credit problems and other fallout from authors wrote. Other companies that have industry is flush with liquidity, partly due
the pandemic. emerged strong from an economic crisis to government programs that were creat-
ed to prop up consumers
and companies. A steep
drop in consumer spend-
ing has kept money in
consumer bank accounts,
leading to an estimated $1
trillion increase in deposits,
according to Novantas
research. (See Figures 1.)
On the corporate side,
companies that are con-
cerned about liquidity
have drawn down credit
lines, causing coffers to
swell more than 20% since
the pandemic took hold in
the U.S.
But it’s unclear how long
banks will hold onto those
deposits even as interest
rates hover near zero across
the industry.
For one thing, a contin-
ued weak economy will trig-
ger deposit drawdowns as
consumers and companies
struggle to pay bills. This
will become more apparent
if businesses stay shuttered
and unemployment remains
high when government
stimulus programs expire.
OTHER INDUSTRIES HAVE DONE IT by investing in technology and products Meanwhile, neobanks are luring con-
The history books are filled with com- include Target, Apple and Warby Parker. sumers with distinctive features, driving
panies that used technology to develop Banks can take a lesson from these efficient acquisition costs that are often
new products and find opportunities in success stories by cutting costs surgically. less than $100 per account compared
difficult and uncertain times. Preserving the core franchise is always the with more than three or four times that
After the airline industry was dereg- goal during a crisis, but this time, future for “efficient” traditional banks. About
ulated in the late 1970s, for example, growth won’t come from traditional sourc- 20% of people who switched their prima-
carriers started investing in reservation es like new branches. Instead, banks need ry checking relationship in 2019 opened
systems to better gauge demand and to invest in digitally-driven capabilities. with one of the neo-banks (largely with
created frequent flier programs to build The challenge can’t be taken lightly. Chime or Varo), according to Novantas
customer loyalty. The current crisis has already brought Shopper Research. That number is only
But just 9% of 4,700 companies stud- a number of companies to their knees expected to continue rising.
ied by professors at Harvard and North- because they didn’t anticipate changes Corporate deposits will also remain
western flourished after an economic in customer behavior, didn’t adjust when volatile as the economic slowdown crimps
downturn, according to a 2010 article in those changes became apparent or were revenues and hurts businesses of all sizes.
5 | SUMMER 2020
COVER STORY
FIGURE 1: U.S. DEPOSITS ARE ON PACE TO PEAK AT ROUGHLY $18.6 TRILLION, UP $3.3 TRILLION FROM PRE-COVID-19 LEVELS
U.S. Deposits
Base Corporate Draws Flight to Quality
CARES | Corporate Loans CARES | Small Business Loans/Grants CARES | Individual Payments
CARES | Local Government CARES | Other Fed Direct Lending
19000.00
$495
18000.00 $340
$329
Total Deposits ($B)
17000.00 $604 $340
$329
$660 $604
16000.00 $250
$222 $222 $660
$449 $449 $111
15000.00
14000.00
15,214 15,214 15,214 15,214
13000.00
12000.00
Pre-Covid (Q4 2019) Pre-CARES (3/25) Hypothesized Hypothesized
Deposit Peak Deposit Stable
Consumer Savings | Savings / MMDA Growth
Acquisition Change to existing, net of switch Attrition Growth
70%
60%
50%
40%
30% 22%
20% 17%
22%
12%
10% 9% 3% 5%
2%
0% 1%
-10% -5%
-10% -10%
-20%
1Q19
2Q19
3Q19
4Q19
2/1/20
2/8/20
2/15/20
2/22/20
2/29/20
3/7/20
3/14/20
3/21/20
3/28/20
4/4/20
4/11/20
4/18/20
4/25/20
5/2/20
5/9/20
5/16/20
5/23/20
5/30/20
6/6/20
Notes: CARES encompasses both the original CARES and PPP Enhancement Acts, Assumes only CARES — Corporate Loans will be repaid,
and all other stimulus disbursements will be grants or forgiven | Assumed 50% disbursement for CARES — Corporate and 66% for Fed Main
Street lending program
Source: Novantas Comparative Deposit Analytics (CDA) Database, May ‘20 | Simple average used to protect participant anonymity | Federal
Reserve H8 Data (April 15, 2020), CARES Act (March 27, 2020), and PPP Enhancement Act (April 23, 2020)
6|
DIGITAL PROWESS WILL GUIDE SUCCESS AS COVID-19 LINGERS
The key for banks, then, is to deter- of their best customers and then initiate return to branches once restrictions are
mine how to identify and retain consum- strategies to keep them at the bank. fully lifted, according to a recent survey
er and corporate deposits during a wave Once those characteristics are from FindABetterBank.com. (See Figure
of liquidity and a period of ultra-low identified, banks need to redefine the 3.) That means banks will have to serve
rates that can make all deposits look the way they engage with these customers. these customers from afar — either with
same. Textured customer treatments and The industry is filled with bankers who outbound calling or monitoring of their
precision customer-level management have never interacted with customers digital activity so that the banks can
will be critical to protect relationships outside of the branch, as well as a whole provide assistance when needed.
and demonstrate to the customers that generation of bankers whom have only
their bank is on their side. These are the worked in the boom times. With branch- DIGITAL OPENINGS AND ONBOARDING:
customers whose relationship with the es closed and many customers feeling A BIG OPPORTUNITY
bank extends beyond the basic deposit financial distress, banks need to pivot One of the most important things that
account, generating fee income and con- the way they connect. banks can do to engage with customers
tributing stability in the credit portfolio. So far, banks seem to be falling is to improve the inadequate process of
short — even when it comes to providing digital account opening and onboarding.
CREATING CAPABILITIES simple services that customers want, While it is a priority during the pandemic,
This is the time for banks to harness data such as balance updates via email or these capabilities will also be essential
that create a holistic view of what cus- text. (See Figure 2.) for the future. Afterall, consumers are
tomers want, how they act, where they These challenges are likely to interacting with brands like Zoom, Ama-
spend and what they need. Metrics like remain even after the virus retreats. zon and Seamless more frequently than
deposit stickiness, CD runoff and credit Fewer than half of people shopping for ever in their day-to-day lives and their
risk can help the bank paint a portrait a checking account say they’re likely to sophisticated digital engagement with
FIGURE 2: BANKS AREN’T MEETING CUSTOMER NEEDS IN THE CRISIS
Bank Features: Most Useful vs. Implemented
Most Useful Implemented
35%
30%
25%
20% 21%
18% 18%
15%
13% 13%
10% 10% 12%
9%
7% 6% 7%
5%
3% 3% 3% 3%
0% 1%
Dedicated Text/email Reimburse Budget Customer Regular Virtual Mortgage
banker balance OD/insufficient optimizer support COVID-19 finance payment
updates fund fees via text policy advice deferral
updates
Sample: FABB shoppers week 16/17 (N=212)
Source: Novantas Customer Knowledge | COVID Pulse Survey
7 | SUMMER 2020
COVER STORY
FIGURE 3: LESS THAN HALF OF CONSUMERS SAY THEY ARE LIKELY TO RETURN TO
BRANCHES ONCE COVID-19 RESTRICTIONS ARE LIFTED
Likelihood to Return to Branches
Novantas estimates
(week 1=3/30 to 4/5, week 18 = 7/27 to 8/2)
current attrition
Somewhat/Very likely Neither likely nor unlikely Somewhat/Very unlikely rates are above 50%
60% for accounts that
53%
51% 50%
originate in the
50% 47%
49% 50%
48% 48% digital channel.
45% 46%
42% 43% 42%
41% 40% 40%
40% 37% these companies sets the bar in terms
36% of expectations. Banks must raise that
35%
32% bar quickly, especially when it comes to
30% 31% 31% 32% 33%
29% 29% 33% 30% onboarding and personalization.
28% 28% 29%
30% 27% 29%
25% 26% 31%
Unfortunately, too many banks are
30% 28% 28% still offering sub-par digital service. As
28% 28%
26% 26% a result, Novantas estimates that current
25% 26% 26% attrition rates are above 50% for accounts
20% 23% 24% 23% 23%
22% that originate in the digital channel.
19% Furthermore, customers encounter far
18%
too many pain points during the process
10%
— from application to account funding to
setting up direct deposit. (See Figure 4.)
Although these issues are difficult to
0% solve, customization and personalization
can also help create a bond once the
Week 1
Week 2
Week 3
Week 4
Week 5
Week 6
Week 7
Week 8
Week 9
Week 10
Week 11
Week 12
Week 13
Week 14
Week 15
Week 16
Week 17
Week 18
account is open. That may mean redi-
recting billboard advertising into more
personal experiences, such as sending
emails directly from a dedicated banker
Sample: FABB shoppers week 16/17 (N=212) to making exclusive online offers that
Source: Novantas Customer Knowledge | COVID Pulse Survey can deepen the relationship. The upshot:
corporate and retail customers have
distinct communication preferences. It
FIGURE 4: DIGITAL ACCOUNT OPENINGS ARE FULL OF JARGON AND OTHER PAIN POINTS is the bank’s job to identify those prefer-
ences and meet them.
Most Challenging Parts of Opening an Account Online There is little doubt that the next few
months will be fraught with difficulties.
The good news is that advances in AI
and other technologies mean that banks
are in position to serve customers when
33% 26% 23% 13%
Accessing the they need help the most.
Understanding Filling in It took a
necessary personal
financial jargon forms online long time Rick Spitler
information
Co-CEO, New York
rspitler@novantas.com
Kevin S. Travis
Sample: FABB shoppers who opened an account digitally (N=205) EVP, Toronto/New York
Source: Novantas Customer Knowledge | FABB DAO Survey ktravis@novantas.com
8|
SITTING DOWN
with Novantas:
The Role of Marketing Mix Models
BY ROBIN SIDEL
9 | SUMMER 2020
MARKETING
Vijay Viswanathan knows that it isn’t enough to win
customers with just great products and services. As an
associate dean and associate professor at Northwestern
University’s Medill School of Journalism, Media, Integrated
Marketing Communications, Vijay studies how consumers
make decisions and the corresponding implications for
marketing strategies across a range of industries. He also
helps companies move beyond traditional static marketing
programs to ones that are dynamic and responsive to today’s
customer demands. Those strategies will be even more
important as banks navigate the ways in which customer
behavior will change in a post-COVID-19 world.
Furthermore, the need to optimize marketing spend will
be critical in coming months as historically low interest rates
intensify cost pressures. A vibrant and enhanced marketing
mix model will help banks target the most valuable customers.
Novantas recently sat down with Vijay to talk about the
role of marketing mix models in banking today.
Q: What is the biggest value that Q: Are banks using this data to their
marketing mix models can provide to advantage?
companies today?
A: Marketing mix models have been
Banks haven’t done a A: The issue has been banks haven’t
done a good job leveraging the power of
around for more than three decades and
have extensively been used by retailers
good job leveraging their data. They tend to rely on marketing
mix models that use highly-aggregated
and consumer-goods companies. While the power of their data rather than understanding the
huge strides have been made in devel- underlying motivations and preferences
oping more sophisticated approaches
and methodologies along with greater
computing power and data availability,
data. of individual customers. They then use
these aggregated models to figure out the
return on investment and how to allocate
marketing mix modeling hasn’t changed resources. But when you sum everything
much over time from a conceptual point has been difficult to appreciate the impor- across segments and markets, you suffer
of view. At the core, these models help tance of data and the capabilities needed from aggregation bias. These aggregated
managers decide where to allocate their to make use of that data. When you don’t models also do not help you respond to
marketing resources to achieve their have sufficient expertise in-house to take changing consumer behaviors, especially
business goals. the results from the analysis and translate when the marketplace is subject to signifi-
them into action, then data is of little use. cant external shocks, like a pandemic.
Q: Which industries are the most sophis-
ticated in using marketing mix models Q: Where do banks rank? Q: What are the implications of that?
for valuable insight?
A: Banks have a great advantage over A: Look at what happened in retail, even
A: The Amazons of the world are perhaps traditional consumer goods companies before COVID-19. Many retail giants
the most sophisticated. Companies that in that they already have their customer, closed shop because they failed to lever-
have a strong engineering and/or comput- or first party, data. On the other hand, if age the power of data to respond to their
er-science base understand the power of I buy a soda from a convenience store, it customers’ changing needs and relevant
data and technology. It is a part of their cul- is difficult for the soda company to know factors that influenced their purchase
ture, whereas for most other companies, it that I am their customer. decisions and behaviors.
10 |SITTING DOWN WITH NOVANTAS: THE ROLE OF MARKETING MIX
Q: How does the transition to digital
banking impact marketing mix models?
A: Well, digitization has now enabled If you’re not in front of the customers with
many banks to deploy an omnichannel
marketing strategy. Marketing mix mod- the right content when they are looking for a
els can provide managers a good idea of
which channels effectively drive individu-
product or service on their phone,
al consumer behaviors and, subsequently,
different marketplace outcomes, such as
sales, profitability, new customer acquisi-
you have lost them.
tion and customer retention across time
and space. While marketing mix models
can include digital marketing efforts, they A: We have now transitioned from dig- money on paid media. You need to
can also include a whole range of custom- ital marketing to dynamic marketing. appear in front of the consumer like a
er characteristics, such as demographic Here, you should have the capability to magic genie with your best content
or psychographic variables, the firm’s assimilate continuous feedback from and service when the customer actually
marketing efforts in offline channels and, the market so that you can finetune and needs you. While digital marketing was
importantly, measures of brand equity. optimize your marketing operations about moving from share-of-voice to
in almost real-time. You have to be so share-of-attention, dynamic marketing
Q: What are some of the new types of much more agile and responsive. It’s is about moving from share-of-attention
marketing capabilities that are valuable not enough to have a website with a to share-of-influence.
to banks? ton of information or spend loads of
Q: How does the domination of mobile
devices change marketing strategies?
A: Mobile is the dominant platform for
people to access and share information.
You have to understand the context
behind a human-mobile interaction first
so that you can push out the right content.
Compare it with stores and their shelves
a decade ago. If you didn’t have a product
on the shelf, you lost customers. In today’s
world, if you’re not in front of the custom-
ers with the right content when they are
looking for a product or service on their
phone, you have lost them.
Q: Let’s talk about your personal banking
habits. When is the last time you went to a
branch and what was it for?
A: I went to a drive-through ATM recently,
but that’s really rare. It’s been many months
since I walked into a branch. The last time I
went to get a physical bank branch was to
get a banker’s check. Today, I use my bank
app for just about everything: depositing
checks, transferring money, making invest-
ments and contacting customer service.
Robin Sidel
Director, New York
rsidel@novantas.com
11 | SUMMER 2020
Vijay Viswanathan | Associate Dean, Associate Professor at Northwestern University’s
Medill School of Journalism, Media, Integrated Marketing CommunicationsRETAIL BANKING
THE NEW BRANCH BAROMETER:
Traffic Patterns BY BRANDON LARSON AND ANDREW HOVET
T
he scramble to overhaul the retail FIGURE 1: THE PANDEMIC HAS CHANGED TRAFFIC TRENDS SIGNIFICANTLY
distribution network is forcing
bank teams to consider branch Activity by Market Type*
closures that were unthinkable
just a few months ago. Con- Feeder Hybrid Work Center
ventional wisdom about which
branches are most efficient, productive 10%
and profitable has been turned upside as
Americans make radical changes in the
0%
way they lead their lives.
In many cases, the COVID-19 pan-
-10%
demic has accelerated changes that
Change in Weekly Visits
were already taking place. But those
changes are far from over and they -20%
aren’t one-time events.
Novantas believes that an ongo- -30%
ing analysis of consumer movement
patterns can help banks as they enter -40%
the next phase of branch closures. This
analysis will also be valuable as some -50%
Americans begin the long transition
back to work from stay-at-home orders
-60%
while others wrestle with new surges
in cases of COVID-19. Such data can
-70%
be particularly helpful on an ongoing
basis as banks consider how to redis-
tribute resources and make real-estate -80%
3/9
3/16
3/23
3/30
4/6
4/13
4/20
4/27
5/4
5/11
5/18
5/25
6/1
6/8
6/15
6/22
6/29
7/6
7/13
7/20
7/27
8/3
decisions at a time when purse strings
are tight due to interest rates that are
hovering at zero and rising credit risk.
Note: Feeder — Primarily markets where people live, but commute to other markets for work;
THE SUPPLY / DEMAND SWITCH Hybrid — Markets where large populations both live and work; Work Center — Places that
The U.S. branch network has long been have a high working population, particularly during the day, but few people live there. Often
a supply-driven business. Banks decid- downtown areas or central business districts
ed where to build branches based on *Markets Included: Atlanta GA, Baltimore MD, Buffalo NY, Los Angeles CA, Memphis TN,
market opportunity, traffic patterns and Minneapolis MN, New York NY, Portland OR, San Francisco CA
competitive factors. In short, banking Source: Novantas Analysis, NovaLocation, PlaceIQ
12 |THE NEW BRANCH BAROMETER: TRAFFIC PATTERNS
was a local scale game where physical
convenience drove density of outlets.
That was all changing even before
the COVID-19 pandemic swept the U.S.,
where banks have been closing branches
at a steady pace since the 2008 financial
crisis. The first wave was largely focused
on underperforming or “dead-on-arrival”
branches that were often unprofitable.
Accounts opened digitally Accounts opened in the
Banks then turned their attention to
low-performing or marginally-profitable
have a first-year retention branch have a first-year re-
locations characterized by lower deposit rate of tention rate as high as
50% 80%
levels and lower sales.
Many banks were still in this phase,
which focused on low-growth commu-
nity and rural markets, before the pan-
demic hit the U.S. in March. It seemed to
be working: banks experienced limited
balance attrition and few lost new sales
in this phase because customers were declines than others, for example. such as those with outdoor restaurants.
already less dependent on branches The situation has been far differ- Others may be best-suited as limit-
than they had been in the past. ent in work centers where traffic had ed-service, appointment-only centers.
Novantas has long believed that the plunged by 70% as of late May. This is
next round of network rationalization unlikely to return to near-normal levels
needs to move beyond the low-risk any time soon since many companies DIGITAL DECISIONS
closures of the past to high-deposit loca- have already said that they won’t be These traffic patterns can also play a role
tions in densely-branched urban and headed back to the office until well after as banks make decisions about engaging
suburban markets. Ultimately, branch the end of the summer — or even next consumers with digital capabilities.
visits will be infrequent and focused on year. Furthermore, a growing number of After all, customers who have been
advice and issue resolution — just like a companies have announced that they forced to stay home are now accustomed
twice-yearly visit to the phone store. will permanently allow employees to to digital interactions with their bank.
work remotely. But banks historically have a first-year
TRAFFIC PATTERNS CAN DRIVE CURRENT Real-time tracking tools will be retention rate of just 50% for accounts
AND FUTURE BRANCH DECISIONS increasingly important as markets that are opened digitally compared with
Although banks have closed branches, remain dynamic; this isn’t a one-time as high as 80% for those that are opened
changed hours and directed customers exercise. Banks that regularly monitor in a branch.
to other channels during the pandemic, traffic patterns in these work centers Customers who live or work in areas
many of the changes in branch traffic have can use them to make decisions about that aren’t seeing a resurgence in traffic
been out of their control. Instead, it is the branches in those areas. Once-prized can be targeted for digital engagement
customers who have driven these new locations may no longer be considered if the bank decides to close branches
trends by following stay-at-home orders. viable. On the flip side, anticipated for good.
Novantas has spent the past few declines in real-estate prices could create Banks can also enhance digital
months analyzing consumer movements opportunities for banks that still want to onboarding capabilities — a typical
across the country by plotting anony- have a presence in these locations. weak spot — for new customers who are
mous cell-phone signals on a base map. The same will likely also be true for acquired through these channels and
This dynamic data show where people retail centers — particularly shopping may no longer be driving to branch-
are shopping, working and visiting. malls — as a wave of bankruptcies, store dense areas.
As of mid-June, visits to bank branch- closings and liquidations pummel the
es and other retail locations were down industry. In addition, many consumers Brandon Larson
30% from pre-pandemic levels, but off the have grown even more accustomed to EVP, New York
April peak of nearly 50%. These figures online shopping during the pandemic blarson@novantas.com
were highly variable, based on geography and may be unlikely to return to physi-
and local market characteristics. Bank cal stores. Banks may be better off put- Andrew Hovet
branches near retailers that were deemed ting branches in shopping areas that are Director, New York
“essential” experienced fewer traffic expected to see a resurgence of traffic, ahovet@novantas.com
13 | SUMMER 2020Clipping
the
Branch COVID-19 has rapidly accelerated the adoption of digital
banking and created widespread uncertainty about the future
of the branch network. Banks have scrambled to close branches,
redirect customers and add digital capabilities as sales
volumes tumble.
Most banks are still being very cautious about shutting
branches permanently. That could certainly change if cost
pressures intensify due to rising credit losses and a slow
economic recovery. Faced with fewer opportunities for physical
banking, consumers will continue the shift toward other
BRANCH PROFILE FOR RESPONDENTS channels, underscoring the importance of digital account
Fewer than 100 branches 22% openings and personalized outreach in a virtual world.
100-200 branches 26% Novantas is tracking these trends closely and conducting
200-500 branches 22%
regular surveys about branch operations. The information
500-1,000 branches 17%
below is based on a survey conducted in June that received
1,000-2,500 branches 13%
responses from 46 financial institutions, representing roughly
Novantas SalesScape Comparative Analytics Survey closed 6/12
18,000 branch locations.
PANDEMIC TRENDS
Teller transactions are down sharply from late 2019 as branches closed or reduced hours of
operation, while digital sales are up sharply.
Decline in Teller Transactions Digital Sales
45% 40% 37%
41%
40% 35%
35% 32% 30%
26%
30%
% of Responses
% of Responses
25%
25%
20% 19%
20% 19%
15%
15% 11%
10% 10% 7%
5%
5% 3% 5%
0%
0% 0%
More than 41% to 31% to 21% to 11% to 1% to 21% to 41% to 61% to 91% to +121%
51% 50% 40% 30% 20% 20% 40% 60% 90% 100%
56% of banks said teller volumes are 26% of banks saw digital sales increase by
14 down
| by more than 31% from Q4 2019 more than 90%LOOKING TO THE FUTURE
Of the branches now closed, banks are being cautious about shutting them permanently,
but many are considering accelerating branch consolidations or expect their network to be
reduced notably within two years.
May Remain Closed / Consolidated Branch Consolidation Considerations by Branch Network Size
Over 1,000 500-1,000 200-500 100-200 Under 100
*Banks could answer more than once per selection
50%
42% 40% 5%
40%
% of Responses
35% 35%
9%
30% 30% 2%
% of Responses
23%
20% 25% 5%
12% 9%
20%
10% 9%
15%
0% 9% 2%
10% 14%
0% 1% to 9% 10% to 19%
5% 2% 7% 9%
2% 2%
0%
40% of banks said they were Delay No plans, Considering Expect
considering accelerating planned planned reviewing accelerating network
branch consolidation / closures consolidations network plans will be reduced
Banks regret not having certain procedures in place
WOULDA, COULDA, SHOULDA before the pandemic struck.
UNDER 100 BRANCHES 100-200 200-500 OVER 1,000
Better call-center technology More digital capability & Increased authority limits Phone & internet-based selling
enablement
Better outbound calling Instant issue at drive-thru Flexible staffing
Shared banker laptops
Cross training of branch staff Remapping of call center Verification of ID over the phone
Chat, video conferencing lines into the branch Appointment setting
Online appointment Plan to quickly move people Work-from-home capabilities
banking to areas that match skill set
Branch employees trained Mobile-acquisition programs
to cover call center
How much smaller do you expect your branch network to be in two years?
Over 1,000 500-1,000 200-500 100-200 Under 100
50% 4%
7%
% of Responses
40%
4%
30% 7% 14%
20% 11% 4% 4% 4%
10% 11%
7% 7%
7%
4% 4% 4%
0%
No Change 1% to 5% 6% to 10% 11% to 15% 16% to 20%
Smaller Smaller Smaller Smaller
15 | SUMMER 2020
Source: Novantas SalesScape Comparative AnalyticsCOMMERCIAL BANKING
New
Strategies
TO MODERNIZE
COMMERCIAL PRICING BY JACOB NYGREN AND MICHAEL RICE
Is a
40-year-old
pricing structure
really the best way
to attract customers?
C
ommercial-banking operations have retained what
Novantas believes is an outdated, labor-intensive pricing
structure that creates friction between bankers and clients.
The inherent problems of a system that has more than
2,000 price points, combined with growing external competi-
tion and a shift to digital transactions, means that banks need
to consider new pricing approaches.
Novantas estimates that an overhaul of commercial
pricing represents a revenue opportunity of nearly $4 billion
16 |NEW STRATEGIES TO MODERNIZE COMMERCIAL PRICING
to banks, but only for institutions that ture originally sought to balance bank NEW PRICING STRUCTURES
have the foresight to embrace innova- profitability and market needs within the Novantas has identified at least four
tive pricing before weaker economics regulatory limitations imposed by Reg Q. promising structures that can re-make
take hold. Legislators repealed the rule 10 years ago, commercial pricing — just as they have
but there has been very little change to done in other industries. Simplified
DECAY OF THE STATUS QUO the status quo. package pricing and subscriptions are
Today’s commercial-pricing structure has Indeed, the burdens of this legacy two that promote a simplified user expe-
evolved from the framework of Regulation structure remain and are arguably as rience and streamline the sales process
Q, the 1933 federal rule that prohibited cumbersome today as ever before, to promote deeper advisory-based client
the payment of interest on commercial despite the many available alternatives. interactions. Banks can also consider
deposits. At the time, bank-profitability Essentially, commercial pricing has customized pricing plans that use
models relied on the revenue generated stagnated Essentially, commercial pric- algorithms or link pricing directly to the
by these deposits to offset the costs of ing has stagnated due to inertia even as value it creates.
transaction activity. digital advances create new opportuni- Under simplified package pricing,
Earnings credit rates (ECR) took hold ties for an overhaul. legacy constructs such as ECR can
PAIN
POINTS
No matter what their size, com-
panies grapple with a tangled
web of data about their banking
services. Here are some key num- Average pages of account Average number of unique Unique service line items
bers, based on analysis of more analysis statements per service line items used managed by most banks
than 10,000 bank statements that month across all bank
were provided by nearly 200 relationships
corporates and cover more than
60 banks.
Source: Novantas NDepth bank fee analysis data
as interest rates soared in the 1970s and Corporates and bankers alike feel be shelved in favor of direct interest.
1980s and banks gradually began adding the pain points associated with com- Complicated and cumbersome service
more transaction fees and services. mercial banking pricing. In some cases, line item pricing can yield to fixed-fee
Pricing schemes became more complex, companies struggle to digest thousands package pricing or all-in product pric-
required more time to manage and nego- of pages of account analysis each month. ing. By collapsing service line items
tiated relationship pricing became the A simple goal to consolidate monthly into a single package, banks can shift
rule rather than the exception. fees paid, compare monthly changes and the perception of “nickel-and-diming”
This ever-expanding complexity understand how pricing compares across customers into one that offers standard
introduced increased friction within banks becomes a herculean task for the features “free of charge.” With package
the sales process that continues to exist typical treasury group that operates pricing in place, banks can still selec-
today. In fact, a typical bank relationship without intelligent fee-analysis software. tively offer value-based add-on features
manager (RM) now spends an estimated On top of all that, near-zero interest like enhanced reporting or industry-spe-
225 hours per year on lengthy price rates and corporate belt-tightening tied cific specialty offerings.
negotiations, addressing billing errors, to the global pandemic are leading to The “banking as a service” concept
describing the minutia of service line increased scrutiny over bank fees. Disin- draws on the pricing model used by
item pricing and evaluating how pricing termediation by fintech organizations and many software companies to better
compares (or more often, doesn’t direct- slow growth in new treasury management reflect value and promote deeper client
ly compare) with competitor banks. fees and services further exacerbate the integration. This model helps shift the
The current cost-based pricing struc- headwinds faced by commercial banks. relationship dynamics from being purely
17 | SUMMER 2020COMMERCIAL BANKING
CREATIVE
PRICING BUNDLE/PACKAGE SUBSCRIPTION CONTINGENT PERSONALIZED
ACROSS PRICING MODEL PRICING* ALGORITHMIC PRICING
INDUSTRIES Non-bank:
New-car option
Non-bank:
Amazon Prime
Non-bank:
Investment
Non-bank:
Car insurance
Banks have been slow to packages banking fees
modernize commercial-pric- Bank: Bank:
ing structures, but they can Bank: Tiered online Bank: Broad and complex
embrace new methods by Cash banking platform Receivables relationships
examining how other indus- management for (bronze, silver, management
tries have embraced creative importer gold)
pricing models.
BENEFIT: BENEFIT: BENEFIT: BENEFIT:
Simplifies Simplifies Based on real or Customized and
purchase purchase anticipated value unique
*based on proactive
role in billings and
collections based on
defined success criteria
transactional to one that delivers more ship data (risk, attrition, scoring) and tioned to benefit as the industry expands
value-based analytics, data and advice. market benchmarks (pricing, penetration beyond its historical domain of trans-
Under this model, banks can put them- to establish optimal, client-level pricing). action execution into the value-added
selves in the enviable position of being realms of data, analytics and advisory
a transactional, informational, analyt- THE ARGUMENT FOR MORE services. Improved pricing schemes will
ical and advisory hub for their clients. EFFICIENT PRICING encourage deeper client relationships
The contingent pricing concept By shrugging off the yoke of the past and supporting technology will unlock
seeks to directly tie pricing to value. Fees and adopting modern commercial pric- additional capacity, empowering a more
are calculated based on measurable real ing schemes, banks can introduce struc- effective sales force.
or expected benefits to the client. For tures that more clearly reflect the value Ultimately, these changes will herald a
example, accelerated receivables can of the business for the client. This type new era in commercial banking as friction
produce a measurable improvement in of overhaul can simplify sales efforts, in existing pricing schemes is reduced,
days-sales-outstanding (DSO), which promote efficient pricing and profit- yielding greater operational efficiencies
leads to quantifiable working capital ability and offer a client experience that and a restoration of economic equilibrium.
benefits for the client. Or customers can rivals fintech competitors. And in the long run, banks will be
share in the revenue benefits that come Sales personnel, now freed from the compensated for the value delivered
with commercial-card performance, such shackles of complex price negotiations, and transparency in pricing will effec-
as customer penetration, higher average can pivot to truly become advisory tively restore bankers as collaborative
spend or reduced fraud. This can cement partners. Client interactions that were business partners rather than potentially
the banker as an advisory partner invest- once centered around nitpicking line perceived as exploitative vendors.
ed in clients’ success. items can evolve into conversations of
Finally, banks can use intelligent how consolidating volumes can improve Jacob Nygren
algorithmic pricing models to provide pricing through economies of scale, how Principal, Chicago
unique client-specific pricing that can be new products benefit their organization jacob_nygren@treasurystrategies.com
used for the entire book of business. This and/or advisory discussions on process
personalized approach to pricing uses vast optimization. Mike Rice
amounts of client behavior data (channel, Financial institutions that revamp Managing Director, New York
customer-service engagement), relation- pricing structures will be well-posi- mrice@novantas.com
18 |Surge Deposits:
How to Manage the Balance
Sheet in a COVID-19 World
BY MIKE JIWANI AND PETE GILCHRIST
M
ore than $2 trillion of deposits myriad scenarios that could develop in A prudent approach can help main-
have flowed into U.S. banks coming months and years. At the heart tain balance sheet stability through
since early March, represent- of this strategy is the need for banks to the cycle. This involves determining
ing an unprecedented surge. understand the potential behavior of financial objectives and constraints,
Spurred by government programs and a these surge deposits, dictating how they planning for multiple potential sce-
strong desire for liquidity by companies could be put to use on the asset side. narios, developing a coordinated and
and consumers alike, banks are now This should involve developing centralized action plan and developing
awash in deposits. The trend is drawing detailed surge-deposit analytics to proj- appropriate monitoring and gover-
attention from regulators and bankers, ect structural and stressed liquidity, as nance to make course corrections
creating new questions about balance well as customer-level analytics to make as necessary.
sheet management as old Treasury informed estimates of balance behavior Taking these steps now can help
models essentially become obsolete. based on a vast array of data points prevent the need for a panicked and
Banks need to develop strategies about the customer’s past holdings, likely expensive overcorrection down
for managing the balance sheet under current position and likely future path. the line.
19 | SUMMER 2020TREASURY
FIGURE 1: TOTAL U.S. DOMESTIC DEPOSITS — Q4 2019 A LONG LIST OF UNKNOWNS
The months of uncertainty around
Consumer | $6.9T Commercial | $3.6T Wealth | $2.5T COVID-19 are unlikely to retreat any-
Small Business | $1.2T Public Funds | $1.0T time soon. Before the virus hit earlier
this year, the banking industry had been
experiencing a relatively stable deposit
7% environment. The Fed had signaled it
planned to keep rates flat for the fore-
8% seeable future, and while the deposit
market was still active with accelerated
money in motion, trends had become
somewhat predictable. (See Figure 1.)
But the industry has been anything
16% Deposits by Segment 45% but stable since early March when a
(% of Total Deposits) large influx of liquidity started to enter
the system. The Fed cut rates by 150
basis points to zero in a matter of two
weeks and companies planned for the
worst by drawing down credit lines to
shore up liquidity. These actions, com-
bined with government programs such
24% as the Payment Protection Program
and stimulus payments, have fueled the
surge in deposits. (See Figure 2.)
Furthermore, the ongoing pandemic
Source: Novantas Analysis, FDIC SOD report; Z1; Includes commercial and savings banks,
has significantly, and perhaps perma-
savings / lending associations, and credit unions
nently, changed the way in which people
and businesses conduct themselves in
FIGURE 2: U.S. DEPOSIT BASE seemingly every facet of life — a devel-
opment that has turned past assump-
Total U.S. Domestic Deposits tions about deposit behavior on its head.
The future behavior of these depos-
Baseline Deposits Surge Deposits
its is now at the heart of critical ques-
$18
tions banks are asking themselves. How
Total U.S. Domestic Deposits ($T)
quickly will these surge deposits burn
$17 down? What is the worst-case scenario?
How can a bank make the distinction
$16 between high- and low-quality deposits,
given there are limited differences in
product and cost between them in an
$15 ultra-low rate environment?
Sensitivity to rates will also be a major
$14 factor. How will these deposits react when
rates finally rise again? If rates go nega-
tive, what actions should the bank take
$13
with respect to product design, pricing
and marketing? Is it wise to be the first
$12 mover or is it better to wait for others to
act? How will deposit customers respond?
Ja -18
Fe -19
M 19
Ap -19
M r-19
Ju -19
Ju 9
Au 9
Se -19
O -19
N -19
De -19
Ja -19
Fe -20
M -20
Ap -20
M r-20
Ju -20
Ju 0
0
1
l-1
2
l-2
Finally, banks will need to consider
b-
n-
n-
c
n
ar
ay
g
p
ct
ov
c
n
b
ar
ay
De
changes to models underlying asset/
Note: Total H8 deposits grossed up to equal total U.S. domestic deposits, which includes liability management, funds transfer
deposits from commercial and savings banks, savings & loan associations and shares from pricing and stressed liquidity, as well as
credit unions the overall impact on the institution’s
Source: Novantas Analysis; H8 Report asset strategy.
20 |SURGE DEPOSITS: HOW TO MANAGE THE BALANCE SHEET IN A COVID-19 WORLD
Because they don’t know how these type when the rate cycle turns. Banks
surge deposits will behave, most bankers will need to reevaluate their Treasury
have invested these funds in short-term, models and apply new assumptions and
low-yielding assets. While longer-term overlays to account for the recent surge
assets provide limited incremental value in deposits.
at the moment, yield curves could steep- Next, banks should evaluate margin-
en as the economy stabilizes. That means al initiatives to affect the balance sheet.
banks could leave valuable net interest These initiatives should be evaluated
margin on the table if they don’t optimize centrally so that they can be compared
their balance sheets. The impact could
be significant: Novantas has found that Keeping a relatively across lines of business and relative
to Treasury actions. This will help the
balance sheet optimization can be worth
as much as 50 bp in return on equity or
stable balance bank determine things like the need
and capacity for incremental funding
two percentage points of earnings per sheet position that and which funding sources (customer or
share growth — all while staying within non-customer) are most efficient.
the bank’s risk appetite. optimizes through the Of course, things rarely go as
HOW BANKS HAVE BEEN REACTING
cycle is ideal. planned, so banks must be prepared
to pivot as necessary. Banks should
Banks are already pursuing different monitor performance and the economic
strategies to manage these surge depos- environment closely, developing early
its. Some bankers are happy to have warning indicators that suggest when
them because they provide much-need- changes are needed. Additionally, the
ed liquidity relief. Others are worried bank should install an appropriate
these surge deposits will crimp NIM as The key to success is around prepar- governance structure to ensure it is
loan growth slows and there isn’t a pro- ing for multiple potential scenarios and in a position to make course correc-
ductive place to put these excess depos- being nimble enough to pivot as needed. tions as necessary. This will limit any
its to use. Some are even worried these “whiplash” a bank may incur as it tries
deposits will affect capital and liquidity STRATEGIES TO MANAGE THE to manage its balance sheet through a
ratios, believing they may be forced to BALANCE SHEET tumultuous environment.
raise capital at an expensive time. This Novantas believes that banks can best The uncertainty gripping the
is driving some banks to move deposits manage these uncertain times by first industry today requires that banks take
off balance sheet and/or make more identifying their financial objectives. a thoughtful approach and prepare
aggressive rate cuts to reduce balances. What is the bank looking to optimize? It for a range of scenarios to manage the
Additionally, banks are beginning may be earnings growth, return on equi- current surge in liquidity. Proper prepa-
to question the near-term value of low- ty and/or some other goal and it likely ration can ensure banks aren’t left in a
cost core deposits if rates stay low for an involves optimizing in the near-term sub-optimal balance sheet position for
extended period. Others are willing to while not sacrificing long-term success. whatever lies ahead.
invest in the key capabilities required to The bank must do this while continuing Advanced institutions already are
win core customers, betting the deposits to operate within its risk appetite, with analyzing deposit behavior at the custom-
and associated fees will put them in a a particular focus on capital, leverage, er level for both retail and commercial
better position if and when the economy liquidity and interest-rate risk. lines of business, enabling banks to be
returns to some sort of normal state and Once the goal is identified, the bank more surgical about pricing and targeting
rates begin to rise. needs to prepare for a number of poten- decisions. For example, which products
Whatever strategy a bank is taking, tial scenarios. Novantas recommends and customers would have the lowest
the last thing a bank should do is take that these scenarios include a V- and/ balance impact from reducing rates?
drastic actions only to overcorrect down or U-shaped recovery, a prolonged In other words, the more granular,
the line. Keeping a relatively stable low-rate environment — such as 0% for the better.
balance sheet position that optimizes the next three years — and a period of
through the cycle is ideal. Uncertainty negative rates. Mike Jiwani
in the future has only made this task Each scenario should include projec- Director, New York
more challenging: without a clear sense tions of funding needs (based on expect- mjiwani@novantas.com
of what will happen in the future, it is ed loan growth and credit performance)
hard to project how the balance sheet and how deposits will behave. This Pete Gilchrist
will react and what actions are needed should include estimates of burndown EVP, New York
to optimize. rates and analysis of betas by deposit pgilchrist@novantas.com
21 | SUMMER 2020THE CD CYCLE:
Managing Runoff
with Customer
Treatments
With rates hovering at zero, how do you keep
customers who have been getting more than 150
basis points on their deposits for the past year?
More importantly, do you want to?
22 |THE CD CYCLE: MANAGING RUNOFF WITH CUSTOMER TREATMENTS
CD portfolios are on pace to run off 40% of balances over the course of a year. That would
be modestly higher than levels seen in 2007-2009. The runoff is driven by low rates and the
desire of customers to switch from term deposits to liquid savings. This proprietary snapshot
from Novantas’ Comparative Deposit Analytics (CDA) platform shows the trend.
Annualized CD Growth | All Terms
Annualized Growth 4-Week Rolling Average
20%
10%
0%
-10%
-20%
-30%
-40%
-50%
Quarterly Weekly
-60% CDA data CDA data
1Q19
2Q19
3Q19
4Q19
1-Feb-20
8-Feb-20
15-Feb-20
22-Feb-20
29-Feb-20
7-Mar-20
14-Mar-20
21-Mar-20
28-Mar-20
4-Apr-20
11-Apr-20
18-Apr-20
25-Apr-20
2-May-20
9-May-20
16-May-20
23-May-20
30-May-20
6-Jun-20
13-Jun-20
20-Jun-20
27-Jun-20
4-Jul-20
11-Jul-20
18-Jul-20
25-Jul-20
1-Aug-20
Source: Novantas Comparative Deposit Analytics (CDA) Database, July ‘20 | Simple average used to protect participant anonymity
In the past, banks that sought to reprice these time deposits as quickly as possible
— for as little as possible — later discovered that strategy didn’t work. Not only did
they see large outflows, but they later had to pay more to re-acquire these deposits
when rates rose. Banks that can retain these deposits now when they are inexpensive
(but not the cheapest in the market) can reap the benefits over the longer-term.
23 | SUMMER 2020RETAIL BANKING
More than 60% of current CDs are priced above 1.5%, according to Novantas research. Many
of those customers will feel “sticker shock” when they consider choices for those maturing
funds. Banks need to consider multiple strategies for these customers.
STANDARD RATE DISCIPLINE SHIFT TO MMDA SLOW PLAY EXCEPTIONS
Lower rate sheet rates in line Consider proactive shifting of Customers with prior exceptions
with competitors promo CDs into MMDA/Savings have self-identified (sometimes
Avoid ‘area of indifference’ — to lean into market trends and with banker assistance) as rate
worst place to be is ‘not the best, customer preferences sensitive
not the worst’ Short-duration offers can help These clients are at highest risk
shift deposits while improving for near-term attrition, but
Acquisition rates dampened for
retention, delivered on a back depending on other
now but likely to return as excess pocket or proactive basis characteristics may be long-term
liquidity flows out and branch persistent
Cashable CDs provide similar
traffic rebounds
outcomes if available
Since not all CD customers are alike, banks need to assess
their anticipated behavior before the CDs mature.
Term Renewal Segmentation
Term Auto-Renewal
Likely Not Likely
Low
EXPECTED BEHAVIOR
Likely to auto-renew at go-to rate/term
Not likely to auto-renew, likely to respond to term switch offer
Not likely to auto-renew or respond to term switch offer
Price Sensitivity
ILLUSTRATIVE TREATMENT
No additional treatment
Provide term offer with higher rate than current on-sale
Provide savings offer to retain balances in the bank
High
Source: Novantas Comparative Deposit Analytics (CDA) Database, July ‘20 | Simple average used to protect participant anonymity
24 |25 | SUMMER 2020
CHECKLIST FOR EFFICIENT CONSUMER DEPOSIT GROWTH The value of core, relationship-based sticky consumer deposits can’t be underestimated in today’s banking environment. Still, many banks aren’t taking advantage of analytics that can help avoid costly errors and improve their mix of high-value deposits as they navigate this unprecedented period. This checklist for efficient deposit growth can go a long way in guiding banks to make the most of their valuable deposits. 26 |
Determine segments with favorable, higher-value
CHOOSE retention profiles
Identify long-term sticky
deposits Calculate duration analytics for portfolio products and
segments
Analyze primary DDA relationships and core deposit
TRACK growth versus single-service hot money
Assess loyalty versus hot
money Leverage flow-of-funds level detail to spot new versus
existing money and attrition risk
Analyze weekly rate position and understand true
market clearing rates across acquisition and portfolio
COMPARE balances by peer set and industry totals
Align results to timely
peer data Explain variances to core industry metrics, providing
executives a clear picture into key bank performance
versus the market
Monitor customer cross-sell behavior over time and
DEEPEN
retention impact
Measure cross-sell activity,
including new-to-bank Analyze the effectiveness of promotional campaigns,
households including marginal cost of funds
Efficiently target new money without cannibalizing the
OFFER existing book
Define offers to deepen
relationships, gather and Pinpoint the best market and product to launch a
maintain deposits campaign, tracking key competitor and market
reference rates across both direct and branch channels
27 | SUMMER 2020You can also read
