Weekly Term Accounts APY Spread and Premium Index–Jun 27

by tom 27. June 2016 14:01

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 | Deposit Products

Talking To Customers Promotes Loyalty and Limits Rate Shopping

by Tom 26. June 2016 18:53

When you offer market research, you have to have some idea as to how your research findings affect your customers’ customers. We offer the most up-to-the-moment data on deposit rates, loan rates, and fees, but for our customers to see real value in our research, they have to understand how that rate data has a direct impact on their customers. They have to look at rates in light of customer sentiment as well as how their rates track against the market.

Which is why I was surprised to read this week that the banking industry is not particularly adept at listening to their customers. A recent survey of retail banking customers conducted by PeopleMetrics reveals that 1 in 5 bank patrons have input they want to share with their bank on ways to improve the customer experience.

Monitoring customer experience and customer sentiment is an active process that requires speimagecific tools and techniques, but the act of actually engaging with customers it itself clearly pays off. For example, according to the study about half of banking customers believe they have access to materials that are helpful in guiding financial decisions. Those that believe they have the tools they need to help manage their money had a net promoter score (NPS) of 79, while those who did not feel they have access to helpful financial tools had an NPS of 26. If banks want a) happy customers and b) customers that will share that positive experience with friends, then banks need to find new ways to engage with customers and listen to their concerns.

Customers want to feel that their unique requirements are being met and they are doing business with a bank or credit union that cares about them and their financial needs. That’s why you measure customer experience in the first place. You have to listen to customer to learn about their experience, what they like, and what’s missing. The act of listening alone will improve customer loyalty, so finding new ways to poll customers in itself will promote loyalty; “My bank cares about my opinion!”

It has been demonstrated time and again that the more you engage with customers and listen to what they have to share about the customer experience, the more you promote customer loyalty. And the more loyal your customers are, the easier it is to get those customers to accept unpopular moves such as lower deposit rates and higher fees. If you have a rapport with your customers and they feel they have your ear, they are going to be more willing to accept lower rates and higher fees. At the same time, you can be more assured of maintaining customer loyalty, since customers will be less likely to shop rates and migrate to the competition.

So as you are conducting competitive research to see what the competition is up to, be sure you consider customer sentiment and customer loyalty in your analysis. New convenience features such as mobile banking and peer-to-peer payments could be exactly what your customers want. However, did you ask them first? Creating a culture of customer feedback can help you build customer loyalty and improve revenue at the same time.

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Banking Trends | Consumer Confidence | Market Research

Weekly Term Accounts APY Spread and Premium Index–Jun 20

by tom 20. June 2016 15:22

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 | CD rates | Building Deposits

Weekly Term Accounts APY Spread and Premium Index–Jun 13

by tom 13. June 2016 16:30

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–Jun 6

by tom 6. June 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:

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National Pricing Indicator | Deposit rates | Deposit Products | CD rates

Rethinking Branch Banking With Omnichannel Marketing

by tom 5. June 2016 13:18

Banking pundits have been predicting the demise of brick-and-mortar banking for some time now. The new generation of Millennial customers live in the digital world, and all transactions can be handled by smart handheld devices, right? A number of financial institutions such as Bank of America have started offering inline-only;y banking that actually charges fees for in-branch deposits and other transactions. However, don’t count branch banking as a loss-leader just yet. It seems that branches have just as much value as they always have although the role of branch banking is changing.

According to a new study from Wells Fargo,  younger customers are using their handheld devices more than ever, but they are still relying extensively on brick-and-mortar banks. The latest information from Wells Fargo shows that 72 percent of millennials aged 18 to 34 are using mobile banking apps, compared to 50 percent for Generation X (35 to 50 years old), and 19 percent of Baby Boomers (aged 50 and older). However, 63 percent of millennials also use branch banks as opposed to 68 percent of Gen Xers and 69 percent of Boomers. image

Like other customers, millennials need in-branch banking products such as loan processing, mortgages, money transfers, and other value-added services. The same study shows that millennials visit branches less frequently – on average, six times each quarter as opposed to seven times per quarter for older customer segments – but they still use bank branches.

To cut overhead, Wells Fargo and other banks are reducing their geographic footprint, closing some bank branches but assessing markets to make sure they “right size” their brick-and-mortar presence. At the same time, banks are getting smarter about adopting new omnichannel marketing strategies to bring the right kind of new business into branch banks. Banks are creating a mash-up of the in-branch and digital experience to improve customer service.

Bank products can be complex, and most customers are uncomfortable working through complex transactions online. Electronic bill pay and mobile bank deposits is one thing; negotiating a used car loan or line of credit is another matter. More banks are initiating online interaction or video-enabled chat so customers can talk to a bank representative over a digital link. It’s still not the same experience as sitting across the desk from your banker and closing the deal with a handshake.

To promote more of an omnichannel customer experience that brings together digital and physical banking, banks and credit unions are adopting new strategies:

New marketing centers – Some banks are changing the look and feel of their branch banks, turning them into retail showrooms to highlight banking products. These hubs offer banking services with video links to financial specialists. There also are “pop up” branches and video tellers to provide a new kind of branch banking experience blending technology and personal service.

A converged banking experience – Banks and credit unions also are combining online and in-branch transactions. For example, a customer can start a loan application online and then make an appointment with a banker to review and sign the paperwork. A number of credit unions are partnering with other companies to offer custom shopping services for new and used cars; the credit union handles the car loan and the partner finds the perfect car. Customers are able to manage their money through any channel, e.g. by making loan payments online, by check, or in person.

So the hype about the demise of the brick-and-mortar bank is just that, hype. It seems that brick-and-mortar banking will be with us for some time to come, but how those branches operate and how they serve customers is going to change to optimize the new digital banking experience.

Weekly Term Accounts APY Spread and Premium Index–May 30

by tom 31. May 2016 11:33

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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You Gotta Have the Right Data to Optimize Deposit Pricing

by tom 24. May 2016 18:02

Once again, there are rumblings that the Federal Reserve is getting ready to raise interest rates. And with the rumblings the banking community is poised to adjust their rates, including deposit rates and deposit pricing. In recent months (years) banks and credit unions have been adopting a strategy of reducing deposit pricing in an effort to attract new money. As we noted last week, in the current market climate the notion of reducing rates to increase volume would seem to make sense, but consumers aren’t thinking that way. So with more rate changes on the horizon, how are you supposed get it right when it comes to setting the optimal deposit pricing?

Once again, Chris Nichols, the CenterState Bank Correspondent, offers some interesting insights. As Chris notes, “many banks are unknowingly cheapening the deposit account for no good reason as the relationship between fees and deposit balances are negative for many products.” As part of his earlier discussion of how community banks are leaving revenue behind by decreasing fees, Chris observed that darts-856367_640“balances are increasing more because of behavioral economics than fee elasticity.” In his new blog post he introduces the concept of “Relasticity”; a measure of price/volume sensitivity that also takes into account depositor behavior.

Pent up demand among consumers is driving a deposits and when setting deposit pricing the old rules really don’t seem to apply. For example, Chris notes that 5-year CD products are more rate sensitive than 3-year CDs by a slight margin, and checking and savings accounts don’t see to have any rate sensitivity. So optimizing deposit rates is really a matter of understanding where consumers are sensitive about rates and which products will benefit.

The tendency is for bankers to reduce rates to attract more customer because they lack confidence in the market, i.e. they suffer from “deposit insecurity.” In many cases the data will tell you otherwise. For example, strong loan volume would imply you need to raise rates to attract more loans. However, if you look at the data you see that the threshold for rate sensitivity is fairly low, so raising rates may actually erode value.

When optimizing rates, you can crunch the numbers however you like but you have to start with accurate data. They need to be able to use granular deposit rate data that reflects specific deposit products, doing an analysis on a case by case basis. Using old research reports or data tainted by lumping categories together, such as mixing jumbo and premium accounts, will skew the results so you can’t accurately optimize deposits.

Of course, we like to read what Chris is doing with deposit rates because he is using our data. We are committed to delivering the most accurate and precise rate data possible to promote more accurate deposit pricing. Chris keeps finding new ways to apply Market Rates Insight data to drive more precise pricing strategies, which is what we want for all our customers.

Weekly Term Accounts APY Spread and Premium Index–May 23

by tom 23. May 2016 17:06

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:

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Banking Trends | CD rates | National Pricing Indicator

Weekly Term Accounts APY Spread and Premium Index–May 16

by tom 17. May 2016 05:06

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:

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National Pricing Indicator | CD rates | Deposit Products


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