This data-driven segmentation approach — which considers factors such as retention profile, usage patterns, profitability, and propensity to use other bank products — enables banks to deliver an experience for its customers that minimizes attrition and run-off. It also empowers banks to tailor targeted marketing efforts, personalized fit-for-purpose solutions and value-added services to specific customer segments. By leveraging technology, optimizing onboarding, maintenance, servicing and customer engagement processes to create an “ease of doing business” experience — while simultaneously fostering an internal culture of innovation — banks can drive organizational transformation and facilitate the adoption of solutions that increase deposit growth. Establishing clear key performance indicators, building internal relationship manager (RM) sales effectiveness competencies, monitoring progress and implementing feedback loops enable banks to measure success, make necessary adjustments and realize the full potential of their initiatives in deposit growth. Targeting Operating Accounts Examining operating accounts within your portfolio reveals a significant number of low-margin deposits that are often overlooked. Operating accounts, with their tie to treasury services and various financial flows, possess a high level of stickiness. But it’s important to note that a customer’s payables, receivables and merchant services are often distributed across multiple banks. This makes targeting operating accounts critical as they’re the most entrenched in a bank’s ecosystem and are very challenging to move. Banks can identify opportunities to consolidate funds and improve deposit stickiness by proactively engaging these account types — and can be done by investing efforts to deepen relationships identified from data-driven segmentation, supported by a clear and focused sales enablement function, and supported by an execution change management strategy. This strategy aims to increase the stickiness of operating accounts and organically improve the overall deposit mix and volume. Banks can strengthen and expand their deposit base by focusing on targeted customer relationship building, addressing potential product imbalances and encouraging customers to allocate deposits that align with their treasury and credit needs. Making Banking Easier Via Enhanced Account Opening To effectively target the identified segments, financial institutions must ensure that their onboarding and account opening are streamlined and customer-centric. Simplifying account opening procedures, reducing paperwork (thus eliminating redundant requests for customer information) and leveraging digital technology can create a frictionless onboarding experience that encourages customers to initiate and maintain banking relationships. This should be streamlined for existing customers where KYC and other data attributes are already available within the bank — while focusing on ease and simplicity for the broader, net-new customer experience. This pillar of success lies in creating a frictionless and easy customer experience, facilitated by using digital tools and associated processes. With data-driven segmentation, strategic focus and investment in key relationships, and the enabling power of technology, financial institutions can drive deposit growth and build lasting customer relationships. For example, implementing digital account opening technologies allows customers to easily submit required documentation digitally, leading to reduced time and effort needed for onboarding on the bank’s side. By leveraging this sort of technology, optimizing processes and fostering a culture of innovation, banks can drive organizational transformation and facilitate the adoption of TM solutions that increase deposit growth. Conclusion The power of data-driven strategies in treasury management cannot be understated when it comes to driving deposit growth. By utilizing data segmentation, targeting operating accounts and strategically sizing opportunities, financial institutions can unlock substantial deposit growth and retention potential. An effective execution strategy — backed by robust technology tools and change management practices — ensures the realization of value and the achievement of KPIs. By bridging the white space in TM and deposits, banks can position themselves as leaders in the commercial banking space and foster long-term customer relationships while expanding their deposit base. Jordan has nearly 20 years of experience consulting in the banking industry. Jordan currently leads West Monroe’s team of approximately 250 employees in Southern California. Prior to taking on this role, Jordan led West Monroe’s national Treasury Management practice as well as the Midwest Financial Services delivery teams in Chicago and Dallas. Jordan joined West Monroe in 2012. Jordan’s tenure at West Monroe has been marked by projects for the top 25 U.S. banks, major regional banks and large credit unions. He was the lead on a project in which he and the West Monroe team identified and quantified an immediate opportunity of $124 million in incremental annual revenue for the bank. They also outlined a five-year roadmap for the bank to achieve $228 million in incremental annual revenue. He earned a bachelor’s degree from Georgetown University. Utah Banker 19
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