What Banks are Getting Wrong About Growing Deposits (Hint, It’s not just a marketing issue)

Growing deposits was the one topic that every single banker brought up in our booth at ICBA Live recently. Fraud, customer retention and staff productivity also came up, but it always went back to deposit growth. What struck me the most was the sense of urgency around it.

So I started digging in to learn more about deposit growth. After reading dozens of articles, blogs and even a whitepaper, I realize why bankers are eager for fresh thinking. The general consensus is that banks need better marketing. Refining local SEO capabilities, optimizing the website and leveraging social media were the most cited suggestions. 

One blog even recommended bringing back the toaster giveaway for opening a new checking account. While the nostalgia might appeal to some, it’s unlikely enough to get a prospective new customer over the chasm. 

The assumption is that a lack of awareness is holding banks back from growing deposits. Once communities know about your bank, they’ll suddenly want to open an account, add a credit card and explore lending options. Or so the thinking goes. As a marketer, I understand the value of reaching target audiences with clear differentiation and a compelling call to action. But marketing is only part of the equation. To truly grow their customer base and loan book, banks need to make it as easy as possible to open an account, apply for a loan and guide them through highly complex interactions. 

Friction is a significant challenge to growing deposits and in today’s digital-first world, it’s only becoming a bigger obstacle. Better toasters, higher cash incentives and aggressive ad campaigns will not solve the disappointing experience customers have trying to open an account or apply for a loan. In fact, 48% of consumers who experienced digital friction took their business to another bank, according to Bank Director magazine. 

Imagine how much easier it would be to grow deposits by keeping nearly half of your customers from churning? Finding ways to simplify and accelerate the digital onboarding process for new customers removes friction and keeps them from leaving before they even get started. Now consider how many more loans you could convert by making the online application easy and straightforward.

Customers increasingly expect a guided experience with recommendations that are relevant to their particular need. Think about how Amazon effectively increases sales by suggesting additional products at each purchase point. What if your bank could offer auto insurance as part of each auto loan approval notification. Or help a customer open a deposit account when they are approved for a credit card.

Guided, friction-less experiences can help banks grab a bigger share of incoming opportunities that in turn fuel growth. Better yet, positive experiences deepen loyalty and make customers more receptive to cross-sell and up-sell opportunities. Instead of playing defense, your bank can actually go on the offense to maximize share of wallet. 

That’s not to say banks should abandon marketing altogether as a deposit growth strategy. It plays an important role, but is completely wasted if your bank can’t then provide an easy, customer-centric solution for opening an account or for applying for a loan. Marketing combined with friction-less customer experiences not only attracts new customers, but keeps them engaged and loyal. Which helps grow deposits both short-term and over the long run. 

Learn more about ATTUNE’s revenue-growth platform, bringing digital onboarding, digital lending and cross-sell opportunities together on one friction-less platform at www.getattune.com