The Challenge of Bank Deposit Growth
Perhaps you have been very aggressive with new loan strategies. Let's say that all of those promotions, incentives, and low rates have paid off handsomely, and now you are maxed out on your loaning capability. The only fix for this kind of fantastic success is to get more funds in-house to loan out. The best way to do this is to stimulate deposit growth, and with the loan response you've had, you need to get the deposits flowing right away. It's time to make a plan and develop deposit growth strategies.
The 4 Step Deposit Growth Strategy for Financial Institutions
Step 1: Engage Existing Cardholders
There is a good chance that you already have many quality cardholders that would be willing to increase their deposits with your institution. You need to engage these consumers and make them aware of the many services offered to them by being a cardholder at the institution.
The best approach would be to identify your highest potential consumers first. Put together a relationships team to reach out to them and establish a rapport. You will want these cardholders to know that you have their best interests at heart. While the goal is successfully implementing a deposit growth strategy for your financial institution, the secondary goal is to shore up relationships with your best cardholders.
Step 2: Entice Deposits by Making It Convenient
Today, financial customer service is not just extended hours and smiles from the tellers. Most cardholders have come to expect online banking to be standard, and to compete you need to be able to offer it to any potential new depositors. But you can take this step in your deposit growth strategy a bit further by providing assistance on moving online financial data.
Take a look at your online process as a new cardholder and make notes of where the process could be improved. The goal is to make it as user-friendly as possible. You'll want to be sure that there is no reason for someone to abandon the account once they start the process.
Don't stop the refining process at the online entry point. Take a fresh look at the physical bank process as well. You'll want that brand-new depositor to feel welcome in your establishment and leave with a good feeling about having your business. In deposit growth strategies for financial institutions, word of mouth is one of the most powerful ways to gain new business and as a result, more deposits. The process starts with making sure that the consumer leaves happy.
Step 3: Evaluate Cardholder Satisfaction
Put together a process to gauge the satisfaction of existing cardholders. A simple but effective method can be as easy as asking a single question - How likely are you to recommend our services to friends and family?
This process, known as the Net Promoter Score®, makes it easy to gauge and improve cardholder’s satisfaction and keeps your efforts in line with your financial institution’s deposit growth strategy. When you ask the question, the member can respond on a score of zero to ten. The goal is to move the detractors (0-6) to the passives (7-8). In turn, try to move the passives to the promoters (9-10) level. The critical thing about promoters is that they will, as the name suggests, promote your financial services. This is an excellent source of word of mouth for growing your business.
There are other methods of evaluating member satisfaction, and the team doing the calling in step 1 above can also collect this information. Having a measurable means of knowing you have the best level of service is essential to depositor growth and it should be a key component in your deposit growth strategy.
Step 4: Never Underestimate the Power of a Reward
People like a reward, especially if it is something that they were already considering doing. Providing an incentive for new deposits can help stimulate deposit growth. Cash rewards remain an effective means of enticing new cardholders. Consider offering tiered rate increases to keep new cardholders engaged and actively depositing.
Limited time aggressive CD rates can serve as their own reward and can be very useful in attracting new business.
With the right deposit growth strategy for your financial institution, meeting projected goals is possible. Engaging existing cardholders can help stimulate depositor growth by encouraging them to bring more of their financial activities into your institution. Making deposits as convenient as possible for cardholders will promote growth but, be sure and gauge satisfaction as a tool for ongoing improvement. And finally, never underestimate the power of a good reward for depositing. Deposit growth can be a simple process using tools already at your disposal.
Contact us to see how we can help with your financial success.