Winding down specials will reduce interest rate risk, while a shorter liability profile can protect net margin.
A bank’s financial performance tomorrow depends on pricing decisions today. But if projections about tomorrow are false, today’s pricing decisions will be flawed.
Lagging behind credit unions and alternative lenders, community banks need to get back into consumer lending by focusing on technology, front line sales and partnerships.
Findings from a game theory exercise show that in a competitive-rising-rate environment, we tend to price deposits about 13% above the normal average of the competitive set.
Banks need to start considering reducing fees and making up the lost revenue by raising minimum deposit balances.
Behavioral theory suggests that deposit rates start rising prior to an anticipated increase in the Fed funds rate because of our tendency to try to outdo the competition.
High-yield, rewards-based checking accounts can help financial institutions weather a rise in interest rates.
As the economy improves and consumers regain financial strength, now is the time for banks to reintroduce credit cards to their payments portfolio.