Weekly Term Accounts APY Spread and Premium Index–Aug 29

by tom 29. August 2016 12:51

Market Rates Insight features a weekly APY Spread and Premium indices to provide pricing executives with greater insight into national pricing trends and practices.

APY Spread Index

The APY spread is a simplified form of a standard deviation. It measures the variance between the high and low ends of the price range to the average, which indicates whether the APY of a particular CD is closer to the low or the high end of the pricing spectrum.

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Premium Index

Premiums are used as the main vehicle to drive balances towards the most desired deposit products, and are an indication of the capital strategy of each individual institution. This week’s highest and lowest national premiums:

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National Pricing Indicator | Market Research | CD rates

Fed Rate Rise Seems On Hold–Welcome to the Business As Usual

by tom 26. August 2016 20:30

It’s too early to start betting on the outcome of the World Series so who is placing bets on whether the Fed will raise federal benchmark interest  rates at their meeting in mid-September? Fed Chair Janet Yellen isn’t dropping any useful hints one way or the other, so it seems that banks and credit unions will have to wait to see if there is any change in the Fed’s feelings about raising interest rates.

Yellen was speaking today at Grand Teton National Park and hinted that a rate rise is in the offing, but was unclear about the timing for a rate hike. In her remarks she stated:Image result for janet yellen

“In light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months.”

The timing is even less specific than in May, when Yellen predicted a rate hike over the summer months. The reasons that experts cite for the delay in action by the Fed are many. First, there is the employment market. The employment figures have been disappointing, and unless the August job numbers look considerably better the Fed will likely delay any rate hike.

The coming presidential election throws another unknown into the mix. The outcome of the election may affect business confidence one way or another. Similarly, the Fed decided not to make a decision on rates until after the United Kingdom made its Brexit decision to leave the European Union.

There are any number of variables that could delay a Fed decision, whether those variables are well-reasoned or not. In the meantime, the banking community waits, hoping that the Fed will act and raise rates in order to relieve the drought of interest revenue. However, most bankers are waiting for a rainmaker; they continue to pursue more reliable sources of revenue such as service fees.

This is the new normal. Today there are many bankers working today who have never experienced a “normal” rate climate. Rates have been low for so long that bankers have forgotten what it’s like to have robust deposit rates. That’s why more banks are getting creative and conservative about fees. For example, fewer banks and credit unions are offering unlimited ATM transaction rebates as a means to improve fee revenue without offending customers. More banks are looking to implement new fees for consumers and business customers in order to fill the vacuum of deposit rates. And since banks and credit unions have been tightening their belts for so long, waiting for a Fed rate hike, many are making an art out of  service fess as a business necessity.

So it’s business as usual and the future is still uncertain, at least as far as the Fed is concerned. As Benjamin Franklin said, “In this world, nothing can be said to be certain expect death and taxes.” That certainly rings true when trying to trying to predict what the Fed has planned for interest rates.

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Fees | Deposit rates | In The News

Weekly Term Accounts APY Spread and Premium Index–Aug 22

by tom 22. August 2016 12:56

Market Rates Insight features a weekly APY Spread and Premium indices to provide pricing executives with greater insight into national pricing trends and practices.

APY Spread Index

The APY spread is a simplified form of a standard deviation. It measures the variance between the high and low ends of the price range to the average, which indicates whether the APY of a particular CD is closer to the low or the high end of the pricing spectrum.

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Premium Index

Premiums are used as the main vehicle to drive balances towards the most desired deposit products, and are an indication of the capital strategy of each individual institution. This week’s highest and lowest national premiums:

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CD rates | Building Deposits | National Pricing Indicator

Citizens’ New Head of Explains How Technology Changes the Game

by tom 21. August 2016 18:57

If you have been reading this blog for some time you know we love mobile and online banking. Progressive banks and credit unions are investing more money and resources in developing their digital banking solutions to delight their customers and pave the way toward the future. One of the financial institutions that has been striving to take a lead in banking technology is Citizen’s Financial Group of Providence, Rhode Island. American Banker interviewed the newly appointed head of digital for Citizens,image Lamont Young, who had some interesting insights about the future of digital banking, many of which we have been observing for a while now:

1. Convergence of digital banking channels – Mobile banking has been the market buzz for some time now banks and credit unions compete to make the most of the popularity of the smartphone. Research from Javelin Strategy shows that, for the first time, mobile banking is outpacing branch banking. And there are a number of customers who do most of their banking at home via the web. Young, like so many others, see mobile and online converging into a single digital banking channel.

Today’s consumers are interested in convenience, and whether that’s using their smartphone, their tablet, or their laptop, they are all in favor of any initiative that saves them a trip to the bank. Citizens already has 85 percent of its banking services available online, and the digital channels are going to blur so that customers will get a similar experience online of via mobile device, although banks are going to lead with mobile access first for the foreseeable future.

2. New financial technology startups offer new opportunities – We have written about financial tech companies in the past and the potential threat that Apple Pay, Google Wallet, PayPal, and others pose to banks and credit unions. New fintech companies seem to hit the market every day, and banking pundits are divided on their impact on the industry.

Young sees these fintech challengers as a positive influence on banking, As he says:

“I'm actually more excited than most about the advent of fintechs, particularly some of the new startups, because I see them less as threats for traditional financial institutions and more of an opportunity — an opportunity for us in some cases to partner, an opportunity for us in other cases to acquire, and in some cases just an opportunity to learn.”

One thing is for sure, new financial transaction models driven by technology are going to continue to emerge, and banking can learn by their example. One thing that startups bring that banks do not is a willingness to try new things. Start-ups are particularly adept at adapting to customer needs, adopting to the theory that it’s better to “fail fast” and adjust your strategy based on feedback; something banks should try.

3. Banks need more than better products to compete – One thing that Young has learned at Citizens is that banks can no longer compete using products alone. Today’s consumers tend to be more concerned about the banking experience than the products themselves. As Young notes:

“We have found that brand experiences in many cases mean more to the customer than the actual products and services of the brand itself. We have done a ton of work around experience-mapping and taking a look at where we are as part of the customer life cycle, what those touch points are, whether they engage with us in a digital channel or within our branch network or over the phone.”

Of course, that doesn’t mean that banks and credit unions can stop offering superior financial products. It’s still essential to be competitive with product offerings and rates. However, consumers are shopping for both products and brand experience. You may offer the best rates around, but it’s ease of use and technology-driven product access that will keep customers coming back.

You are going to see more financial institutions creating roles such as “head of digital banking.” Technology is changing too fast and becoming too important to leave in the hands of marketing or sales executives who have other concerns. Digital banking has come into its own, and smart banks and credit unions are getting smarter about how they harness digital to improve customer satisfaction.

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Weekly Term Accounts APY Spread and Premium Index–Aug 15

by tom 15. August 2016 12:37

Market Rates Insight features a weekly APY Spread and Premium indices to provide pricing executives with greater insight into national pricing trends and practices.

APY Spread Index

The APY spread is a simplified form of a standard deviation. It measures the variance between the high and low ends of the price range to the average, which indicates whether the APY of a particular CD is closer to the low or the high end of the pricing spectrum.

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Premium Index

Premiums are used as the main vehicle to drive balances towards the most desired deposit products, and are an indication of the capital strategy of each individual institution. This week’s highest and lowest national premiums

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Weekly Term Accounts APY Spread and Premium Index–Aug 8

by tom 8. August 2016 17:36

Market Rates Insight features a weekly APY Spread and Premium indices to provide pricing executives with greater insight into national pricing trends and practices.

APY Spread Index

The APY spread is a simplified form of a standard deviation. It measures the variance between the high and low ends of the price range to the average, which indicates whether the APY of a particular CD is closer to the low or the high end of the pricing spectrum.

image

Premium Index

Premiums are used as the main vehicle to drive balances towards the most desired deposit products, and are an indication of the capital strategy of each individual institution. This week’s highest and lowest national premiums:

image

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National Pricing Indicator | CD rates | Building Deposits

Protest Deposits Fueling Growth for Minority-Owned Banks

by tom 8. August 2016 17:25

With civil unrest on the rise and movements such as “Black Lives Matter” gaining momentum, minority banks are seeing a surge in new money. Minorities are started to protest with their pocketbooks, taking their money and depositing it in minority-owned financial institutions as a way to show solidarity with their community.

imageSome reports say the trend began in early July on an MTV News and BET News Town Hall event when Atlanta rapper Killer Mike encouraged blacks to start putting their money in black-operated banks. The call to protest with cash followed the protests over the shooting of black men in Louisiana and Minnesota. “We can’t go out in the street and start bombing, shooting, and killing,” said the rapper. “I encourage none of us to engage in acts of violence. I encourage to take our warfare to financial institutions.”

The result has been very positive for minority-owned banks. Citizen’s Trust, a black-owned banking network with branches applications through Georgia, received applications for 8,000 new deposit accounts in less than a week. This is an important trend for minority banks and black-owned banks in particular. According to the Atlanta Black Star, there were 130 black-owned banks between 1888 and 1934; today there are 22.

“There has been a decline in banks in general,” Teri Williams, President and Chief Operating Officer of OneUnited Bank, told the Atlanta Black Star. “There also has been a decline in community banks that were the size of a lot of the Black banks that went out of business.”

National Bankers Association president Michael A. Grant asserts that while this new initiative isn’t an all-out boycott of majority banks, it’s still important that African-Americans support their own institutions and diversify how they handle their assets.

“I think it’s a very positive effort to get the community to step up and say look, nobody is going to support us if we don’t support ourselves,” said Michael A. Grant, president of the National Bankers Association. “Let’s start giving support to our own institutions, let’s support our historically Black colleges, let’s support our businesses, let’s support our banks… if we’re going to be considered first-class citizens and respected in this country, we’re going to have to take control of our economic destiny.”

Many see this trend to bank locally and bank black as a resurgence in community pride as much as an economic protest. Grant and others see the migration of dollars to regional and community banks as a positive move. Citizens Trust Bank’s Frederick Daniels Jr., Executive Vice President, told USA Today, “If we can bring together our economics collectively, we can help businesses grow, we can help people obtain home loans. That brings them closer to the American dream. We’re providing a tangible solution for those who want action."

We shouldn’t need to mount a reason to protest to improve awareness and interest in community banks. While the black community may have more incentive to support black banking institutions at the moment, every community can benefit by keeping their money closer to home. Perhaps community banks across the country can learn from the renewed interest in minority banking. Everyone has a reason to think globally but bank locally.

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Building Deposits | In The News

Weekly Term Accounts APY Spread and Premium Index–Aug 1

by tom 1. August 2016 16:42

Market Rates Insight features a weekly APY Spread and Premium indices to provide pricing executives with greater insight into national pricing trends and practices.

APY Spread Index

The APY spread is a simplified form of a standard deviation. It measures the variance between the high and low ends of the price range to the average, which indicates whether the APY of a particular CD is closer to the low or the high end of the pricing spectrum:

image

Premium Index

Premiums are used as the main vehicle to drive balances towards the most desired deposit products, and are an indication of the capital strategy of each individual institution. This week’s highest and lowest national premiums:

image

How old is your competitive fee data?

When was the last time you did a full competitive study on ALL the service fees in your target markets? We can show you want the competition charges TODAY, not six months ago.

Service fees have become especially volatile thanks to new economic uncertainty and pressure from the CFPB. Yet fees are still one of the biggest sources of revenue for banks and credit unions.

You could be setting fees too high and dissuading new customers, or your service fees could be so low you are leaving cash on the table. We can show you how your fees compare to the competition.

Take a live tour and demo our precision deposit pricing tools. Contact us for a personalized live tour today. email:MyRITestdrive@marketratesinsight.com or call 1-800-275-5556.

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National Pricing Indicator | CD rates | Deposit Products | APY

JP Morgan Betting the Bank on Mobile Technology

by tom 28. July 2016 20:06

The big banks have been reporting their quarterly numbers and JP Morgan is leading the pack with a boom in consumer deposits. American Banker reports that in the last year, JP Morgan Chase has added $50 billion in the last year at the same time the number of mobile users grew by 18 percent to more than 25 million users. There is no coincidence that the number of mobile users has increased at about the same pace as deposits. The convenience and power of online and mobile banking technology is what is driving many consumers to the big banks, and one of the areas we see smaller and community banks scrambling to compete with their own mobile banking platforms.

imageIt’s no secret that one of the things that sets the big banks apart is the size of their technology budgets. Consumers, especially Millennials, want convenience and cool mobile banking tools, and as a result, JP Morgan’s consumer and community banking group grew 10 percent to $586 billion. As Gerard Cassidy, an analyst with RBC Capital Markets, notes, “The strong gain in mobile usage is evidence of greater penetration into the consumer market.” To help drive new technology, including mobile banking, JP Morgan increased its tech spending by 11 percent to $1.6 billion.

In fact, JP Morgan believes so strongly in its mobile banking strategy that the company has even come up with Chase Pay, its own mobile wallet designed to compete head-to-head with Apple Pay and PayPal. Starbucks and Shell Oil have already signed on as the first partners to accept Chase Pay.

At the same time, JP Morgan has been able to slash overall expenses, partly by closing more branches. While branch penetration in strong markets such as San Francisco and Miami is on the rise, the number of JPM branches overall has been steadily declining.

So with banking behemoth JP Morgan claiming more of the mobile territory for banking does that mean that smaller banks can’t compete? Not at all. We are seeing more community and regional banks stepping forward with their own mobile banking solutions, including more mobile banking promotions. In our research for our ProductBuilder database of new bank and credit union marketing ideas and products, we are seeing more regional and community institutions offering incentives for customers to use their e-statements, online banking, and mobile banking  tools. We also are seeing more banks actively marketing mobile banking. Florida Community Bank, for example, is offering a cash bonus to attract new mobile banking users.

While the big banks may seem to have an unfair advantage with larger technology budgets, smaller financial institutions are developing their own strategies to compete using many of the same strategies and tools. Technology can be a great equalizer that is accessible to all, so the smart bankers are watching the big guys such as JP Morgan and learning from their technology successes as well as their mistakes.

Mobile banking is becoming commonplace, but combining convenience with personalized services and specialty products is where smaller financial institutions can gain an advantage. Any bank can implement a mobile banking strategy, but the smart banks are using technology to address customers needs and are nimble enough to adjust their rates and develop new products that provide real value as well as wireless convenience.

How old is your competitive fee data?

When was the last time you did a full competitive study on ALL the service fees in your target markets? We can show you want the competition charges TODAY, not six months ago.

Service fees have become especially volatile thanks to new economic uncertainty and pressure from the CFPB. Yet fees are still one of the biggest sources of revenue for banks and credit unions.

You could be setting fees too high and dissuading new customers, or your service fees could be so low you are leaving cash on the table. We can show you how your fees compare to the competition.

Take a live tour and demo our precision deposit pricing tools. Contact us for a personalized live tour today. email:MyRITestdrive@marketratesinsight.com or call 1-800-275-5556.

Weekly Term Accounts APY Spread and Premium Index–Jul 25

by tom 25. July 2016 16:35

Market Rates Insight features a weekly APY Spread and Premium indices to provide pricing executives with greater insight into national pricing trends and practices.

APY Spread Index

The APY spread is a simplified form of a standard deviation. It measures the variance between the high and low ends of the price range to the average, which indicates whether the APY of a particular CD is closer to the low or the high end of the pricing spectrum.

image

Premium Index

Premiums are used as the main vehicle to drive balances towards the most desired deposit products, and are an indication of the capital strategy of each individual institution. This week’s highest and lowest national premiums:

image

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APY | National Pricing Indicator | CD rates | Deposit rates


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