Deposits

April 11, 2019

5 Effective Tips to Increase Deposits


Deposits

Do global financial institutions (FIs) have a problem in terms of the number of deposits they're receiving?

Here are a couple of statistics to ponder. First, even during a strong economy, bank deposits dropped 2.9 percent in the second quarter of 2018.

Second, in the fall of 2018, the financial industry's ratio of loans to core deposits (which excludes brokered deposits, time deposits, and certificates of deposit) was 90 percent. In other words, 90 percent of deposited dollars are on loan.

Deposit Barriers

Why aren't more people making deposits now? Well, two challenges loom large. First, there's a segment of the population that avoids banking altogether. In a 2015 Gallup survey, approximately 25 percent of respondents said they didn't fully trust financial institutions.

Some people have misconceptions about fees. Others may have been scared off by negative media stories about the financial sector, particularly during the Great Recession. And some individuals just aren't aware of the benefits that FIs can supply.

Second, there are now more places than ever for people to put their money. In recent years, online payment systems like Amazon Pay have proliferated.

Given these realities, how could your financial institution increase its deposits?

Woman holding money

1. Customer Research

To begin with, research is key. Your team should assemble profiles of existing customers who make substantial or frequent deposits. What demographic patterns do you see?

Equipped with that information, you can then target those groups through social media ads, search engine ads, email campaigns and other effective forms of marketing.

2. Promote Popular Draws

Through surveys, try to find out what entices people to deposit money in your FI. Is it the security of strict government regulations and FDIC insurance? Does a sign-up bonus bring folks through your door? Is it something else entirely?

Whatever compels people to make deposits, you should definitely emphasize it in your promotional materials.

3. If Possible, Offer a Higher Deposit Rate

Of course, not every FI is able to raise its deposit rate. However, if you can, you might consider doing so. You could then advertise that higher rate heavily.

Indeed, consider what a Bank Executive Business Outlook Survey from late 2017 found. Raising deposit rates was the most popular way within the industry to get more deposits.

4. Go Local

Do you significantly invest in local businesses and construction projects? If you don't, you might want to start doing so. And, if you do, this fact is a terrific one to promote.

You might even invite local politicians and area businesspeople in for special networking events, which could earn positive media coverage.

Many civic-minded people would be more willing to deposit their money in an institution that helps to build up the community. On top of that, perhaps regional business leaders would recommend deposits in your FI to their employees.

5. Enlist First-Rate Software

It's vital to provide your FI with cutting-edge and truly dependable software. That way, you can be sure that making online deposits will always be easy for your customers. And it will be as simple as it could be to design, create, optimize and manage your digital marketing materials.

In the end, when you have great software coupled with great strategies, major increases in your deposits may not be far behind.

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