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10 Strategies for Delivering an Exceptional Experience in a Digital World

How to foster an innovative and proactive approach to digital engagement that educates and guides members while minimizing friction. Whether it's the advertisements that appear on their social media page or suggestions for movies based on their streaming habits, today's consumers have become accustomed to receiving relevant content from the companies they do business with. Consumers increasingly expect that companies will anticipate their needs and offer proactive guidance at the right time. One firm that illustrates this type of exceptional digital engagement is USAA. Brent Hartman, Director, P&C Digital Product Management for USAA, shares ten strategies for using proactive digital engagement tools to deliver guidance at scale. Strategy #1 - Define Your Overall Mission, Strategy #2 - Understand Your Demographics, Strategy #3 - Focus on Both the Financial Services and Digital Experience, Strategy #4 - Replicate a High-Touch Experience in a Digital World, Strategy #5 - Know Your Data, Strategy #6 - Iterate and Improve, Strategy #7 - Test, Test and Test Again, Strategy #8 - Communicate Proactively, Strategy #9 - Focus on Education, Strategy #10 - Get Started Now.

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Liquidity Concerns Force Banks to get Creative with Deposit Gathering

Low rates, increased competition and a need to court younger clients are forcing small banks to rethink their approach to gathering deposits. Several surveys, including a late 2018 polling of 305 senior-level bank and credit union executives by Cornerstone Advisors and a spring assessment of 571 community bankers conducted by the Conference of State Bank Supervisors, found that deposits and liquidity are among the industry's biggest concerns. Financial institutions are starting to lose more funds to alternative accounts such as Venmo and Square Cash, and savings tools such as Acorns and Stash, said Ron Shevlin, Cornerstone's director of research. As a result, community banks are increasingly going digital and changing their views on what constitutes a core deposit relationship.

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Can U.S. Bancorp Make its Digital Cross-Selling Strategy Work?

What will it take to convert a single-product customer, say a credit card holder, into an across-the-board customer? U.S. Bancorp in Minneapolis is betting that a heavy emphasis on digital banking, plus some selective branch expansion, will help it cross-sell deposit accounts and loans to consumers outside its traditional markets. CEO Andy Cecere, under questioning from analysts about growth strategy during the bank's first-quarter conference call, acknowledged other banks have vowed to do the same thing and struggled. However, it may be more possible now because the banking landscape has changed a lot in recent years.

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Digitization Will Make Most Heritage Financial Firms Irrelevant

By 2030, 80% of heritage financial firms will go out of business, become commoditized or exist only formally. Financial services CIOs should push their organizations for a more coherent response to digital business. Impacts - Digital disruptors will force CIOs in financial services firms to accelerate digital transformation. - Digital ecosystem partnerships will enable disruptors to rapidly scale, and to offer more diversified services to challenge incumbents.

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Some Notable Takeaways From Cyber Banks

2Q - 2018 Ally's retail deposits grew 15% year-over-year. They have an average balance of approximately $54,000. Millennials continue to comprise the largest generation segment of new customers at 56%. In addition, customer retention remains strong at 96% in 2018. CIT's strategy to reduce deposit costs relative to the index shits origination to lower cost non-maturity deposits and lower balance amounts. As a result, savings balances grew by over 23% from $6.4 Billion to $7.9 Billion driving total on-line deposit growth from $12.4 Billion to $13.9 Billion from Q1 to Q2. 1Q - 2018 PurePoint Bank which launched in early 2017 by MUFG Union Bank has generated about $3 Billion in deposits. Marcus has almost doubled their balances since Goldman bought the GE Capital Bank platform in April 2016. 4Q -2017 Synchrony had an 87% retention rate on certificates of deposit balances up for renewal for the year ended December 31, 2017.

Sources: Company Annual and Quarterly Reports and Press Releases

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Gallup: Two-Thirds of Americans Prefer Saving to Spending

A recent Gallup poll shows that 65% of Americans polled prefer saving to spending, marking an all-time high. In contrast, the shar of spenders and savers was equally matched in the early 2000s prior to the recession. For the first time since 2006, half of respondents rated their personal financial situation as excellent or good. Among the 18 to 29 year old demographic, the share of those who enjoy saving more than spending rose from 54% in the early 2000s to 66% Americans are considerably more likely than they were in the easy-credit years preceding 2008 to perceive saving money as more enjoyable than spending it," Gallup said. "And their actions have, at least to some extent, mirrored their attitudes. Saving rates that had dropped from the double-digit levels of the 1960s and 1970s down to an abysmal 1.9% rate in July 2005 are now consistently close to or above 5%."

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