For all the promises of mortgages quick as a wink, quick approvals don’t mean fast cash. Here’s a roadmap to positive change.
Once deposit rates start rising this year, the banking industry will incur relatively high interest expense due to the inelasticity of consumer deposits in a rising-rate environment.
Although deposit rates traditionally lag in a rising rate cycle, the next cycle may be different, putting pressure on banks to improve their deposit pricing skills now.
After six years of extreme insensitivity to falling interest rates, deposits are becoming more price sensitive, suggesting that banks will soon need to pay higher rates.
To replicate the fast growth of nonbank providers, banks need to market payment services as features that can be added to any checking account rather than as part of existing accounts.
The Fed generally raises interest rates within 12 months after deposit rates cease declining and begin turning up; such a turning point appears to be in sight.
Customer data provides a treasure trove of information that banks can utilize to design new products.
Commercial lenders need to get back to the original essence of “know your customer” as the fundamental principle of banking.