Gone are the days when banks could count on depositors seeking shelter from the recession. With rising rates, how can banks rise to the occasion?
While bankers cannot yet foresee all the regulatory fallout from continued investigations of overdraft fees, they can begin planning now for a more sustainable approach to fee income.
If banks want to emulate the ability of alternative providers to make consumer or small business loans quickly, they should focus on speed to the conditional approval.
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.