Core Deposit Growth

After nearly a decade in which deposit funding has largely been taken for granted, industry analysts now predict a deposit squeeze for the banking industry, and for mid-sized and community banks in particular. Many bankers today are too young to remember what a rising rate environment feels like, and many banks haven’t focused attention on core deposit generation in recent years.

But now core deposits are once again taking center stage as a critical strategic challenge for many financial institutions, and growing core deposits is not going to be easy. Most institutions will feel the need for core funding at exactly the same time, resulting in a rather rapid increase in rates and ramp up of marketing and sales activities. Even for seasoned bankers, it’s been so long since the deposit growth “muscle” has been exercised that it likely needs to be rehabilitated. Finally, consumers and media have changed considerably since the last cycle, so strategies that worked in the past are not necessarily going to be as effective this time around.

Now is the time to get a lot more focused on core deposits. And CPG can help. We’ve been working with clients to identify high-potential, low-risk initiatives to grow core deposits through a three-step, cost-effective, and fast process.

A Deposit Growth Sprint’s Three Steps:

1. Scope the Opportunity: review current results by business line; assess competitor results; compare to best practices

2. Deposit Summit: set the funding strategy; prioritize growth opportunities; evaluate ideas for strategic fit and payoff; define game plan

3. Take Action: create teams to fully define initiatives; size the opportunity and cost; create detailed action plans and timelines

Establish First Mover Advantage

While competition has already begun heating up in some markets, it’s early days in the battle for deposits. Now is the perfect time to get your team together to map out and implement a core deposit growth plan, before you need to play catch-up with your local and national competitors.

To learn more about CPG Core Deposit Growth consulting services, contact Mary Beth Sullivan (202-337-7872) or Mark Gibson (508-322-8146).

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